For companies and individuals, advance tax payments are an important aspect of taxation. An advance tax payment is a portion of a company's or individual's overall tax liability that is paid in advance based on the deadlines indicated by the Income Tax authorities. By calculating the advance tax early in the fiscal year, the government is able to get a fair idea of how much tax they can expect to collect by the end of the fiscal year on the profits and income levels in the economy.
Updation of Advance Tax Payment Due Date
It is important to keep track of your tax liabilities during the year and to ensure timely payment of taxes, including Advance Tax Payment online, which are due by certain individuals and entities during the year.
What is Advance Tax Payment?
You need to pay advance tax if you have a tax liability of more than ₹ 10,000 in a fiscal year, whether you are a salaried employee, a freelancer, or a business owner. It should be noted, however, that senior citizens who are over 60 years of age and do not run a business do not need to do advance tax payment online.
An advance tax is paid in Advance on the estimated income of the current fiscal year. Pay-as-you-earn tax requires periodic payments rather than a lump sum payment at the end of the year. Individuals, self-employed professionals, freelancers, and businesses can make an advance tax payment.
Who Should Pay Advance Tax?
Salaried Individuals, Freelancers, and Businesses
If your total tax liability is ₹10,000 or more in a financial year, you must pay advance tax. This applies to all taxpayers, including salaried individuals, freelancers, and businesses.
Senior Citizens
People aged 60 years or more who do not run a business are exempt from paying advance tax. However, senior citizens with business income must pay advance tax.
Presumptive Income for Businesses
Taxpayers who have opted for the presumptive taxation scheme under section 44AD must pay the entire amount of their advance tax in one installment on or before 15th March. They also have the option to pay all of their tax dues by 31st March.
Presumptive Income for Professionals
Independent professionals such as doctors, lawyers, and architects, who fall under the presumptive scheme under section 44ADA, must pay their entire advance tax liability in one installment on or before 15th March. They also have the option to pay the entire amount by 31st March.
What is Advance Tax Late Payment Interest?
- Non-Payment of Advance Tax (Section 234B):
- You must pay at least 90% of the total taxes as advance tax or TDS/TCS by 31st March. Failure to make advance tax payments will result in an interest @ 1% on the unpaid amount.
- Delay in Payment of Advance Tax (Section 234C):
- If Advance Tax Paid by 15th June is Less Than 15%:
- Rate of Interest: 1% per month
- Period of Interest: 3 months
- Amount on Which Interest is Calculated: 15% of Amount* (-) tax paid before June 15
- If Advance Tax Paid by 15th September is Less Than 45%:
- Rate of Interest: 1% per month
- Period of Interest: 3 months
- Amount on Which Interest is Calculated: 45% of Amount* (-) tax paid before September 15
- If Advance Tax Paid by 15th December is Less Than 75%:
- Rate of Interest: 1% per month
- Period of Interest: 3 months
- Amount on Which Interest is Calculated: 75% of Amount* (-) tax paid before December 15
- If Advance Tax Paid by 15th March is Less Than 100%:
- Rate of Interest: 1% per month
- Period of Interest: 1 month
- Amount on Which Interest is Calculated: 100% of Amount* (-) tax paid before March 15
- If Advance Tax Paid by 15th June is Less Than 15%:
How to Pay Advance Tax Payment Online?
Paying advance taxes can be done through the income tax department’s e-filing portal or net banking services provided by authorized banks.
- Visit the income tax department’s e-filing portal
- Click on the ‘e-Pay Tax’ option
- Select the relevant tax payment option
- Enter the required details and make the payment
How is Advance Tax Payment Calculated?
Advance tax payment is calculated based on your estimated total income for the financial year. Here are the steps to calculate advance tax payment:
- Estimate Total Income:
- Calculate your estimated total income for the financial year. This includes income from all sources such as salary, business, profession, capital gains, house property, and other income.
- Deduct Deductions:
- Deduct any eligible deductions under Sections 80C, 80D, 80G, etc., from your estimated total income to arrive at your taxable income.
- Compute Tax Liability:
- Apply the applicable income tax rates to your taxable income to calculate your total tax liability.
- Subtract TDS/TCS:
- Deduct the tax already deducted at source (TDS) or collected at source (TCS) from your total tax liability. This gives you the net tax liability.
- Calculate Advance Tax:
- Divide the net tax liability by the due dates to determine the advance tax installments you need to pay. The due dates and corresponding percentages of total tax payable are as follows:
- 15th June: 15% of the total tax liability
- 15th September: 45% of the total tax liability (cumulative)
- 15th December: 75% of the total tax liability (cumulative)
- 15th March: 100% of the total tax liability (cumulative)
- Divide the net tax liability by the due dates to determine the advance tax installments you need to pay. The due dates and corresponding percentages of total tax payable are as follows:
- Pay the Advance Tax:
- Make the advance tax payment by the specified due dates to avoid interest penalties under Sections 234B and 234C.
Example Calculation:
- Estimated Total Income: ₹10,00,000
- Eligible Deductions: ₹1,50,000 (under Section 80C)
- Taxable Income: ₹8,50,000 (₹10,00,000 – ₹1,50,000)
Tax Calculation (for FY 2023-24):
- Up to ₹2,50,000: Nil
- ₹2,50,001 to ₹5,00,000: 5% of ₹2,50,000 = ₹12,500
- ₹5,00,001 to ₹8,50,000: 20% of ₹3,50,000 = ₹70,000
- Total Tax Liability: ₹12,500 + ₹70,000 = ₹82,500
Less: TDS: ₹10,000 (already deducted)
Net Tax Liability: ₹82,500 – ₹10,000 = ₹72,500
Advance Tax Installments:
- By 15th June: 15% of ₹72,500 = ₹10,875
- By 15th September: 45% of ₹72,500 = ₹32,625
- By 15th December: 75% of ₹72,500 = ₹54,375
- By 15th March: 100% of ₹72,500 = ₹72,500
Note: These amounts are cumulative, so if you pay ₹10,875 by June 15, you only need to pay an additional ₹21,750 by September 15 to reach the 45% threshold.
How to Pay Advance Tax Payment Offline?
If the taxpayer wishes to pay advance tax offline, they may do so by visiting any designated bank and submitting the tax payment form along with the payment. The bank will issue a challan as proof of payment.
Why is Advance Tax Important?
Taxpayers must pay advance taxes as it prevents penalties and interest charges for non-payment or late payment of taxes. It also assists in managing cash flows and preventing a large tax liability at the end of the year.
Benefits Pay Advance Tax Payment
There are several benefits to paying Advance Tax Payment online on time, including:
- Avoidance of interest and penalty charges
- Better cash flow management
- Avoidance of last-minute rush and stress
- Avoidance of default notice by the tax department
When Should You File Advance Tax?
There are four due dates for advance tax payment online during the financial year: 15 June, 15 September, 15 December, and 15 March.
Who is Liable to Pay Advance Tax?
Individuals, self-employed professionals, freelancers, and businesses with a tax liability exceeding ₹10,000 must pay advance tax.
How to Calculate Advance Tax Payment?
Using the applicable tax slabs, taxpayers must estimate their income for the year and calculate their tax liability. The advance tax needs to be paid by the following schedule.
- 15% of the tax liability by 15 June
- 45% of the tax liability by 15 September
- 75% of the tax liability by 15 December
- 100% of the tax liability by 15 March
Empower your financial journey – Our OnIine Tax Calculator is the key to effective tax planning and increased savings.
People Working Under Presumptive Taxes
Advance Tax Payment online – Taxpayers who are calculating their tax under the presumptive tax scheme are required to pay the entire amount of advance tax on a single installment before the deadline of March 15. They can also pay the entire tax liability by March 31. Professionals who have opted for the presumptive tax system need to pay advance tax under Section 44ADA. Independent professionals such as doctors, lawyers, architects, and other skilled professionals can sign up for this program.
Advance Tax Payment Due Dates FY 2024-25
Below is the advance tax payment due dates for FY 2024-25.
| Installment | Advance Tax Payment Due Date | Tax to be Paid |
| 1st Installment | 15th June | 15% of tax liability |
| 2nd Installment | 15th September | 45% of tax liability |
| 3rd Installment | 15th December | 75% of tax liability |
| 4th Installment | 15th March | 100% of tax liability |
Advance Tax Payment Due Dates FY 2023-24
Below is the advance tax payment due dates for FY 2023-24.
| Installment | Advance Tax Payment Due Date | Tax to be Paid |
| 1st Installment | 15th June | 15% of tax liability |
| 2nd Installment | 15th September | 45% of tax liability |
| 3rd Installment | 15th December | 75% of tax liability |
| 4th Installment | 15th March | 100% of tax liability |
Advance Tax Payment Due Dates FY 2022-23
Below is the advance tax slab for FY 2022-23.
| Installment | Advance Tax Payment Due Date | Tax to be Paid |
| 1st Installment | 15th June 2022 | 15% of tax liability |
| 2nd Installment | 15th September 2022 | 45% of tax liability |
| 3rd Installment | 15th December 2022 | 75% of tax liability |
| 4th Installment | 15th March 2023 | 100% of tax liability |
Taxpayers Opting for Presumptive Taxation Scheme – Business Income
| Due Date | Advance Tax Payable |
| by 15th March | 100% of advance tax |
Extended Advance Tax Payment Due Dates
Advance Tax Payment Due Dates – Honorable Finance Minister Nirmala Sitharaman declared in one of the recent press briefings that the due date for filing an Income Tax Return for AY 2020-21 has been prolonged from July / October 2020 to 30th November 2020. The government had also expanded the advance tax collection deadline for FY 2019-20 to June 30th 2020. Extending the last day of submitting federal tax reports was to help those who don’t have to pay deferred tax.
However, according to Sameer Mittal, Managing Partner, Sameer Mittal and Associates LLP and Chairman, International Trade Council in India, it is advisable for taxpayers within the advance tax bracket to deposit taxes before June 30 to prevent any interest on tax liability.
He stated that Section 234 A / B / C and 234E are mainly sections that cover interest and penalties on delayed taxes in advance tax and income tax returns. He clarified what taxpayers have to comprehend from ITR filing extensions as well as Advance Tax payment online dates.
Even as the date of return filing has been prolonged, it was said that interest on advance tax would be charged if not paid before the 30th of June. This extension of the return filing date would only give us the respite from interest as per Section 234A and penalty as per Section 234E for the delay in filing income tax returns. Whereas, interest as per Section 234B and 234C will continue to be imposed after 30 June for any delay in paying FY 19-20 taxes.
Who Can Enjoy ITR Date Extension
If anyone isn’t within the advance tax category, they will receive an extension relief.
Penalties Imposed on Non-payment of Advance Tax
Section 234B talks about the penalties and fines to be imposed in case of a default. Delays can also lead to penalties. All self-employed professionals and businessmen need to pay advance tax where the tax payable even after reducing TDS is ₹ 10,000 or more.
If you have paid later than the due date or the amount paid is less than 90% of the assessed tax you are liable to pay a penalty. The interest under this section which is applicable is 1% on the Assessed tax deducting the Advance Tax. The month is rounded off to a full month and the amount calculated is also rounded off.
How to Calculate the Penalty?
Consider the example:
Saurabh’s tax liability is more than ₹ 10,000 and stands at ₹ 40,000. As no TDS was deducted the entire amount is liable. The due date has passed for advance tax and he pays this amount on May 30 while filing his tax. The last date for the advance tax was March 15 which he did not comply with.
Thus, the interest to be paid will be as follows:-
- ₹ 40,000 * 2 * 1% = ₹ 800.
- ₹ 800 is the penalty one must pay.
Few Important Points Regarding Advance Tax Payment
- Even NRIs are liable for payment of advance tax on their income in India exceeding ₹ 10,000
- You can consider all deductions like Section 80 C and others while paying advance tax
- Advance tax payment online and offline can be done.
- Even if you miss the March 15 deadline for advance tax, you can pay by March 31 of the year and it will be taken as advance tax
- You can use Challan 280 to make an advance payment of tax
- Even if you are a salaried employee but have significant income from other sources like real estate, bullion, stocks, and other investments giving you a profit of ₹ 10,000 and more, you need to pay advance tax.
- People filing taxes under the Presumptive Tax Scheme need to file taxes before March 15.
- Senior citizens are not only exempted but any income apart from business or profession which is an investment will not fall under this category.
- A self-assessment tax that people under specific income and professional categories can use is also a type of advance tax.
Conclusion
Advance Tax Payment Online – There is no doubt that advance tax is a vital part of the economic budget for the income tax department and the government, and it gives them a good idea of the profitability of the businesses in the system in the coming years. More well-performing companies mean there would be a higher advance tax. This will translate into more income for the government to spend on different public policies and pay salaries.
FAQs
What is the advance tax payment online?
Advance payment of tax refers to the process of paying a portion of your estimated income tax liability in advance, rather than waiting until the end of the financial year. It helps taxpayers meet their tax obligations on time and reduces the burden of paying a lump sum at year-end.
How do I pay my income tax advance online?
To pay income tax advance online, you can visit the official website of the income tax department and use the designated payment portal. Select the relevant challan for advance tax payment (usually Challan 280) and provide the necessary details to complete the payment.
What is the last date for advance tax payment online?
Advance tax payments are made in installments throughout the financial year. For individual taxpayers, the Tax Payment Due Date are typically on or before June 15th, September 15th, December 15th, and March 15th of the financial year.
How do I pay advance tax in the new tax portal?
With the introduction of the new tax portal, you can still pay advance tax online by visiting the portal, selecting the applicable form, providing the necessary details, and making the payment through various modes like net banking, debit card, credit card, or UPI.
Can I pay advance tax any time?
No, advance tax payment online have specific Tax Payment Due Date during the financial year. It is advisable to pay on or before the due dates to avoid interest and penalty charges.
What is Challan 280 income tax?
Challan 280 is the form used for the payment of various direct taxes, including advance income tax. It is used by individuals and corporations to pay income tax, surcharge, education cess, and interest.
Is it compulsory to pay advance tax?
Advance tax payment online is mandatory for individuals whose tax liability for the financial year exceeds Rs. 10,000. It is not applicable to taxpayers who opt for the presumptive taxation scheme.
Can I pay advance tax in cash?
No, the income tax department does not accept cash payments for advance tax. You can pay using online methods like net banking, debit card, credit card, or UPI, or through offline modes like cheque, demand draft, or electronic clearing system.
How do I pay tax under section 140B?
Tax under section 140B is paid at the time of regular assessment after the end of the financial year. It includes any remaining tax dues after considering advance tax and TDS (Tax Deducted at Source) already paid.
How to pay Rs. 1,000 penalty in income tax?
The penalty of Rs. 1,000 can be paid under Section 234B if the taxpayer has not paid sufficient advance tax. You can pay this penalty while filing your income tax return for the financial year.
How to fill a challan for income tax payment?
To fill a challan for income tax payment, visit the official income tax department's website or the new tax portal, select the appropriate challan for the type of payment (such as advance tax, self-assessment tax, etc.), and enter the required details accurately.
How do I pay my income tax fee?
You can pay your income tax fee using the designated challan on the income tax department's website or the new tax portal. Choose the relevant challan, enter your details, and complete the payment through the available online modes.
