A Helpful Guide About Advance Tax Payment with Due Dates

March 25, 2024

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Simple to Understand Advance Tax

Advance tax signifies payment of taxes for a fiscal year in the Financial year instead of paying it “during the Income Tax Return Filing”. Alternatively, ‘pay as you earn’.

When is Advance Tax Liable to Pay?

Advance tax is liable to get paid at the time of the financial year in which the amount of tax liable to get paid is INR 10,000 or exceeding that (as per section 208 of the Income Tax Act, 1961).

Who is Obligated to Pay Advance Tax?

Advance tax provisions will not apply to a resident individual in India if the mentioned below conditions are fulfilled –

- The individual resident is of 60 years age or exceeding that at any time during the previous year.

- The resident individual does not have any income levied under the head ‘Profits and Gains from business or profession

On all the assesse the advance tax is applicable but when the resident individual satisfies the aforesaid two stated conditions, he is not needed to make an advance tax payment.For instance- Mr Shyam whose age is 65 years has a total rental income from two house properties of Rs.9,50,000/- annually. Here the two criteria cited i.e. Income is not from the head Profits and gains from business or profession and he is of Age exceeding 60 years, therefore Mr Shyam is not accountable for filing the advance tax even though his tax obligation is more than Rs.10,000.

In What Way Is the Advance Tax Calculated?

The calculation of the Advance tax is conducted by taking the estimated income through all sources (salary + house property+ profits from business or profession+ capital gains+ other sources) as decreased via the investments under Chapter VI A deductions (80c,80d,80g for old scheme) as lessened via Rebate (if any) and any available TDS (as per Income tax portal Form 26 AS). Calculation of Income tax as it is performed during ITR filing as decreased by any TDS which is deducted, whatever balance is liable to get paid required to be paid within the Financial year if it surpasses Rs.10,000.

Important Due Dates for Advance Tax Payments

In different instalments, Advance tax is to be paid. The deadline for payment of different instalments of advance tax is as follows:

Status	15th June	15th Sept	15th Dec	15th March
All assessee (other than the eligible assessee as referred to in Section 44AD or 44ADA)	15% of advance tax	45% of advance tax	75% of advance tax	100% of advance tax
Taxpayers who selected for the presumptive taxation scheme of section 44AD or 44ADA	Nil	Nil	Nil	100% of advance tax

The whole tax liability is required to be paid via Advance tax by 15th March as explained in the above table, you could file the tax beneath the head of advance tax till 31st of March of the respective fiscal year. Late filing of the advance tax beyond 15th March shall make certain interest under section 234B and section 234C shall be levied during the filing of the return. A significant thing to cite here is you could file the tax under the head Advance tax till the 31st of March if you pay in April or subsequently the minor head “Self-Assessment tax” needs to be selected. If you are a taxpayer, it is important to know how to calculate your advance tax payment. The advance tax is a system of paying income tax liability instalments throughout the year instead of paying it once at the year’s end. With the use of SAGInfotech’s Gen I-T software (https://saginfotech.com/genit.aspx), you can calculate your advance tax very easily and quickly. It will automatically check all of your data.

What is the Method to Pay Advance Tax?

Advance tax could be filed in the identical way where you file the Income tax i.e. via net banking or over the counter (for individuals) by posting separate details in the challan.

Most Important FAQs About Advance Tax Payment

Q1. Can I file the Advance tax itself or require any expert advice for that?

If you effectively know the aforesaid computations and are capable of making the numbers you could file the advance tax via yourself through the income tax portal. Based on the previous year’s tax figures If you wish to do Lump sum payments then you could obtain the same on your own, but for the advance tax computation, you can consult with your tax consultant or CA if you wish to have any assistance for that.

Q2. As I do not know about the advance tax payment and computation could I file the whole advance tax in March?

Yes, if you have missed paying the advance tax as per the applicable percentage in the respective quarters, you can make the advance tax payment of the whole tax by the 15th of March (due date for the 4th instalment) and latest by the 31st of March, Interest shall be imposed under Section 234b and section 234c which will be computed during return filing.

Q3. I am not able to have an assessment of my total income for the current financial year, can I pay advance tax as a lump sum amount based on my previous year’s tax amount?

Often taxpayers face difficulty calculating tax liability for the whole year at the initial days of the year. So they pay the approximate amount for the relevant instalments. It is possible to carry out the payment in lump sump amount for the relevant instalment, but if the Advance tax paid is not more than the minimum tax to be paid by the instalment date, then, in this case, the interest amount will be levied under 234B and 234C for the differential amount.

Q4. I had calculated the Tax liability for the year as Rs.1 lakh and paid the first instalment as per that (Rs.15,000/-), but my employer deducted my TDS of Rs.30,000/- in July, how should I pay the further Advance tax instalment?

As per the case, the additional advance tax instalments must be computed after deducting the TDS amount from the total tax liable to get paid (1,00,000-30,000= 70,000 ) is the total advance tax liable to be paid by you now, the second instalment total of 45% of 70,000 =31,500 needs to be paid minus 15,000 paid in first instalment =Rs.16,500/- needs to be paid by 15th Sept, 75% of 70000=52,500/- will be total for third instalment minus 31,500 paid previously =21,000 needs to be paid by 15th December and balance 17,500/- needs to be paid by 15th march.