Calculating Instalment Payments
Method 1: No-calculation method
We calculate your instalment payments based on your income tax returns for the two previous taxation years. We then send you form TPZ-1026.A-V, Instalment Payments Made by an Individual, to inform you of the payments you are required to make.
Method 2: Previous-year method
You calculate your instalment payments based on your net income tax payable and contributions for the previous year.
Method 3: Current-year method
You calculate your instalment payments. It may be to your advantage to choose this method if you expect your net income tax and contributions payable for the current year to be lower than for the previous year.
To do the calculation using method 2 or 3, use form TP-1026-V, Calculation of Instalment Payments to Be Made by Individuals.
Interest on overdue instalments
We charge interest, compounded daily, on any instalment (or portion thereof) not paid by the due date. If you paid less than 75% of the required instalment, additional interest of 10% per year, compounded daily, is charged on the unpaid portion of the instalment.
If you use method 1 and you make the required payments by the due dates, no interest will be charged, even if the amount of the payments subsequently proves to be insufficient.
If you use method 2 or 3 and the amount of your payments subsequently proves to be insufficient, you may be charged interest.