What is Advance Tax?
Advance Tax is a method of spreading out the payment of income tax over the course of the financial year, rather than making a single payment at the end. This system applies to individuals, freelancers, self-employed professionals, and businesses who owe more than Rs. 10,000 in taxes.
What is the deadline for paying Advance Tax?
The deadline for Advance Tax payment applies to individuals and businesses who are obligated to pay Advance Tax and have chosen the quarterly payment scheme.
Tax payments are made in installments on specific due dates throughout the financial year. The due dates for Advance Tax payment are as follows:
• June 15th: 15% of the total tax liability must be paid by this date.
• September 15th: By this date, 45% of the total tax liability should be paid.
• December 15th: 75% of the total tax liability should be paid by this date.
• March 15th: The remaining 100% of the total tax liability should be paid by this date.
How is Advance Tax calculated?
The calculation of Advance Tax depends on an individual’s projected income for the fiscal year and the corresponding tax rates. It is recommended to seek advice from a tax expert or utilize the income tax calculator offered by the Income Tax Department of India to accurately determine the required payment.
Consequences of Missing the 15th June Deadline for Advance Tax Payment
Failing to meet the deadline for Advance Tax payment can result in penalties and interest charges as per Section 234B and 234C of the Income Tax Act. It is crucial to make the payment prior to the due date to prevent incurring such penalties.
Can I modify my Advance Tax payment if there are changes in my income estimates?
Certainly! If you discover that your estimated income has undergone significant changes, you have the option to revise your Advance Tax payment in the subsequent installments. It is advisable to seek guidance from a tax expert to ensure precise revisions and prevent any discrepancies.
How can I make the Advance Tax payment?
You have the option to pay Advance Tax either online through the website of the Income Tax Department or offline at designated banks. When paying online, you can choose from various methods such as internet banking, credit/debit card, and NEFT/RTGS. For offline payments, you can submit the challan at authorized bank branches.
Is there any benefit to paying Advance Tax?
Paying Advance Tax enables you to effectively handle your tax obligations and prevent unexpected financial pressures at the last moment. It also aids in meeting tax regulations promptly and reduces the risk of incurring penalties and interest charges.
Can I seek professional assistance for Advance Tax payment?
It is strongly advised to obtain professional help from a tax consultant or a chartered accountant to ensure precise calculation, timely payment, and compliance with Advance Tax obligations.
Steps to Make Online Advance Tax Payment
Follow these steps:
Step 1: Visit the official website of TIN-NSDL.
Step 2: Navigate to the ‘Services’ section and select e-payment.
Step 3: Choose Challan 280a, which is used for paying advance taxes.
Step 4: Fill in the necessary information, such as bank name, email ID, address, phone number, and the assessment year.
Step 5: Enter the CAPTCHA code provided.
Step 6: The next screen will display your bank’s net banking page, where you can review the tax amount.
Please be aware that the information provided here is a general guideline and may differ based on individual circumstances. It is recommended to seek advice from a tax professional or consult the official website of the Income Tax Department of India for the most precise and current information.
