Advance Tax

Due Date for Advance Tax Payment 15th March 2024: What You Need to Know?

Any person including Individual Salaried Employees with estimated tax liability of more than Rs.10,000/- on total income, must pay advance tax before 31.03.2024 to save Interest except Resident Senior Citizen, not having any business or profession.

Did you know?

IF,

You are an Individual/HUF/Firm/AOP/BOI/Company/LLP or any other person,

And have earned Income from one or more sources during the Financial Year,

On which, Your Estimated Tax Liability is Rs.10,000 or more,

THEN,

You must pay your Tax while you earn in advance in the same year itself,

In 4 Instalments on 15th of every quarter,

Or on or before 31st March in lumpsum, the last day before closing of the Financial Year,

SO THAT YOU CAN,

Save Interest payment on such Advance Tax,

And, Be 100% Tax Complaint.

One of my friends, being a salaried employee, never paid any Advance Tax, since Tax was already deducted on his salaries. When filing his Income Tax Returns, he paid a huge amount of Interest on his Tax liability, due to failure to pay Advance Tax, on additional income from Short Term/Long Term Capital Gains and Dividends, earned on redeeming his Mutual Funds and shares during the Financial Year.

Another such incidence was of my friend’s mother who was a Resident Senior Citizen, was under an exemption from payment of Advance Tax, and conveniently paid taxes while filing her returns of income every year, until one fine day, when she became a non-resident, and was shocked to see a huge amount of interest that had accumulated on her tax amount, for non-payment of Advance Tax, out of ignorance that Advance Tax exemption is only available for Resident Senior citizens.

Sometimes Income Tax filing due dates get extended but without any changes in the interest provisions, and hence interest will be calculated on such tax amount, accordingly, for all assessees.

The Interest amount due to ignorance or delay in payment of Advance Tax was undesirable, and I felt that the importance of Interest provisions and Advance Tax payment on Income earned, needs more awareness.

While solving this case, I thought to myself there might be many more, who might be unaware of such Interest Provisions, and Advance Tax provisions can help them save Interest.

Save Interest
Save Interest

Can you explain in detail?

What is Advance Tax in India? What is the Advance Tax Applicability? What are the Provisions of Advance Tax in India?

Yes, my friend.

Are you a specified professional, and have claimed Presumptive tax benefit u/s 44ADA @50% of Gross Receipts?

Have you claimed Presumptive tax benefit u/s 44AD @8% of Turnover?

Are you a salaried employee or a Self Employed Individual, HUF, Firm, Company, LLP, NRI, AOP, BOI

AND

Have you earned Income from Freelancing?

Have you earned Income from Consultancy?

Have you earned Rental Income?

Have you earned Short-Term or Long-Term Capital Gains?

Have you earned Dividend Income?

Have you earned Interest Income on Deposits?

And Estimated Tax on such Incomes is Rs.10,000 or more,

Then, you are liable to pay the Advance Tax either in instalments or in lumpsum on or before 31st March and SAVE Interest thereon.

Good news! Exemption of advance tax for senior citizens

If you or your parents are Resident Senior citizens of 60 years and above, not having income from business and profession, this calls for complete relaxation from paying advance tax.

If you have earned Income only from Salaries, on which TDS is already deducted, then you will not be liable to pay any advance tax.

Also, If Total Income Tax Liability is equal to the Tax deducted at Source. You might have submitted all the details of all your other incomes to your employer, and Tax Deducted at source was calculated accordingly. So, no additional Advance Tax needs to be paid by you.

Advance Tax Slab for Individual

You being an Individual, your Total Tax on all your Incomes taken together exceed Tax Deducted at Source and is more than Rs.10,000/-, then you will have to pay Advance Tax mandatorily to avoid Interest later. When advance tax is applicable, you should pay advance tax in instalments as follows,

Total Income20Lacs
Total Tax3Lacs
Less: Tax Deducted at Source2.8Lacs
Net Tax Payable20,000/-
Advance Tax PayableAdvance Tax Payment SlabTotal TaxEach Quarter Tax
upto 15Th June15%*20,0003,0003,000
upto 15th Sept45%*20,0009,0006,000
upto 15th Dec75%*20,00015,0006,000
upto 15th March100%*20,00020,0005,000
Advance Tax Slab for AY 2024-25

Advance Tax Due Dates AY 2024-25

Advance Tax payment due date for Fy 2023-24 can be paid in 4 Instalments on 15th of each quarter except in the case of presumptive taxation u/s44AD and 44ADA, where Advance tax can be paid in one single instalment on 15th March or before the completion of the financial year. Following are the Advance Tax Due Date for FY 2023-24

InstalmentsAssesses u/s 44AD/44ADA(Presumptive Taxation Scheme)-PTSAll other Assesses except PTSDue DatesAmount to be paid as Advance Tax
1st InstalmentN.AYes15th June 202315% of Advance Tax
2nd InstalmentN.AYes15th Sept 202345% of Advance Tax
3rd InstalmentN.AYes15th Dec 202375% of Advance Tax
4th InstalmentYesYes15th Mar 2024100% of Advance Tax
Financial Years ending: Last InstalmentYesYes31st Mar 2024100% of Advance Tax
Advance Tax Due Dates FY 2023-24

What is the last date to pay final instalment of advance tax?

Last Instalment of Advance Tax is due for payment on or before 15th March 2024.

Any Tax paid till 31st March 2024 will be treated as Advance Tax paid for the financial year 2023-2024.

Advance Tax Calculator AY 2024-25

How to Calculate Advance Tax for ay 2024-25? What is Advance Tax slab? What are the rate of Advance Tax?

The advance tax rate for the first, second, third, and fourth quarter is a minimum of 15%/45%/75%/100% of total tax liability in 4 instalments or in lumpsum on or before 31st March. It will become easier once you go through the following advance tax calculation format,

Due DatesAmount of Advance Tax to be paid
15th June, 202315% of 1,00,000=15,000/-
15th Sept 202315% of 1,00,000=45,000/-
15th Dec 202315% of 1,00,000=75,000/-
15th Mar 202415% of 1,00,000=1,00,000/-
Total Advance Tax1,00,000/-
Advance Tax Calculator for FY 2023-24

What happens if Advance Tax is not Paid? Is Interest u/s 234b of income tax leviable?

Failure to pay advance tax interest calculator: Section 234A,234B and sec 234C is applicable. If advance tax is not paid or tax paid is less than 90% of tax payable, then Interest will be leviable at 1% per month on such delayed payments.

Example,

Advance Tax Interest Calculator

Interest on Advance Tax SectionAdvance Tax not Paid Rs.1,00,000/-,Return filed on 30th June 2024
Sec 234ANIL(No interest if tax paid and return filed before Due Date of Filing ITR is 31.07.24
Sec 234B1,00,000*1%*3=3,000/-
Sec 234C1,00,000*15%*1%*3=450/-
1,00,000*45%*1%*3=1,350/-
1,00,000*75%*1%*3=2,250/-
1,00,000*100%*1%=1,000/-
Total Interest on Advance Tax8,050/-
Advance Tax Interest Rate

Any Advance Tax deposit paid in excess of actual tax liability is refunded by the Income Tax Department, on completion of your assessment.

Tax deposited can be seen in 26AS by login into your income tax account under Taxes Paid.

Difference between Advance Tax and Self-Assessment Tax,

Any amount of tax paid before the completion of the financial year is an Advance Tax and any tax paid after 31st March of the financial year is a self-assessment tax. Advance Tax 100 online payment whereas self-assessment tax is paid under code 300 in ITNS 280.

What is the benefit of paying Advance Tax?

  • Save Interest,
  • Be 100% Tax Complaint,
  • Pay Tax without any Last-minute rush and estimate your Total Income in advance.

How to Pay Advance Tax and modes of payment of advance tax online,

Advance Tax has to be paid through online mode in case of corporates and audit assessees and a choice for others to pay either online or physical across the bank counter.

5 Simple Steps on how to pay Advance Tax In India Online,

Here is the procedure of paying advance Income Tax,

  • Login to your Income Tax Site at www.incometax.gov.in
  • Under E-File> Select E-Pay Tax
  • Add New Payment
  • Select Income Tax, Assessment Year, Advance Tax, Fill Tax details, Continue
  • After login in to your bank account, you can pay Advance Tax liability and download the acknowledgement or get a copy of tax paid from Payment History.
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5 Steps on How exactly is Advance Tax calculated?

You might be wondering on How is Advance Tax Calculated and paid, so here are the steps to calculate Advance Tax,

Step-1: Make a total of all your income earned from Salaries, Rental Income, Short Term-Long Term Capital Gains, Other Sources and Profits from Business (Income Less: Expenses).

Step2: Claim all deductions u/s 80 respectively.

Step3: Calculate Income Tax Payable as per Income Tax slabs applicable in your case,

Step4: Check your 26AS for Tax deducted at source from all such incomes.

Step5: Calculate the Net Amount of Tax Payable as Advance Tax (Step3- Step4)

Example,

Advance Tax Computation
Advance Tax Calculation

Advance Tax under which Head

Since Advance Tax is a Tax paid in advance and hence classified under Assets as “Loans & Advances” in Balance Sheet. It is finally offset against the final tax liability.

In Conclusion,

Pay your advance Tax on all incomes earned during the financial year, either in instalments or on or before the completion of the financial year, 31st March and SAVE Interest and be 100% Tax compliant.

Now it’s your Turn.

Pay Tax, Save Interest and Relax.

Do you have any questions?

If you want any clarifications about advance tax, send your details to [email protected]

You can also contact me here

FAQ’s

who is liable to pay advance tax

Every Person being an individual, HUF, AOP, BOI, Firm, LLP, Company or any other person having estimated tax liability of more than Rs.10,000/- is liable to pay advance tax.

when to pay advance tax

One should pay Advance Tax on or before 15th June, 15th September, 15th December or 15th March. Tax paid on or before 31st March, the completion of the year in which income is earned is also considered as advance tax paid with respect to that fianncial year.

how to calculate advance tax

Compute your total income, then calculate tax liability based on your income tax slab applicable in your case, reduce the tax deducted at source, and calculate the final advance tax to be paid.

why advance tax is paid

Advance Tax is paid in 4 instalments during the year in advance, except if you have opted for Presumptive Taxation Scheme(PTS). If you have not paid any advance tax, then you will have to pay interest on such tax additional.

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