Provisional Tax Assessment: Who Qualifies and What You Get
Freelancers can use this scheme to pay income tax in monthly installments to avoid a large single bill at the end of the year.
A Provisional Tax Assessment allows freelancers to spread their tax obligations over several months instead of paying everything at once.
Who it's for
This is designed for freelancers whose income changes from month to month and may not be easy to predict.
What you get
Instead of facing one massive tax bill at the end of the year, you gain the ability to pay your income tax in monthly installments.
What it costs you
To use this, you must be able to accurately forecast how much profit you will make over the course of the year.
The catch to know
If your business performs better than you anticipated and you earn more than your forecast, you will owe a large amount in interest later.
How to apply
- Calculate your expected annual profit for the year.
- Use the official tax portal to request an assessment.
- Set up monthly payments based on your forecast.
- Monitor your earnings throughout the year to adjust your payments if your income changes.