The deadline for the latest installment of advance tax payment falls on December 15, 2023, and it is crucial for taxpayers to make the payment. This is because failure to comply with this deadline may result in penalties and interest charges.
Here’s a breakdown of the essentials surrounding advance tax and the consequences of missing the due date.
What is advance tax?
Advance tax is an income tax payment made in advance throughout the fiscal year, rather than at its conclusion. It is paid in installments as specified by tax laws.
Who needs to pay advance tax?
According to Section 208 of the Income Tax Act, 1961, individuals with projected tax liabilities of Rs 10,000 or more, after accounting for tax deducted at source (TDS) from the preceding year, are required to pay advance tax.
Penalties for missing advance tax payment
Penal interest, governed by Sections 234B and 234C, applies to defaults in advance tax payment. A 1 per cent per month or part thereof interest is levied under both sections.
Section 234B pertains to delays or shortfalls in advance tax payments, while Section 234C applies to non-payment or underpayment of individual advance tax installments.
Advance tax payment exemptions
Resident senior citizens, individuals aged 60 years or above during the relevant financial year, without income from business or profession, are exempt from the obligation to pay advance tax.
Check advance tax due dates
On or before June 15: 15 per cent of the advance tax must be paid.
On or before September 15: 45 per cent of the advance tax (less tax previously paid) must be paid.
On or before December 15: 75 per cent of the advance tax (minus tax already paid) is due.
On or before March 15: 100 per cent of the advance tax (minus tax already paid) is due.
How to pay advance tax
Click here to visit the Income Tax website.
Click on “e-Pay tax,” enter PAN and mobile number, and continue by entering the OTP received.
Select the assessment year and choose “advance tax” from the drop-down menu.
Enter the tax amount and continue. Select payment options and proceed.
Click “Pay Now” to complete the payment.