Advance Tax for Individuals – Payment Dates, Penalty and Interest

The advance tax is tax that you pay prior to the ending of the financial year. This is tax that you can pay in the form of installments or all at once, on specific dates that are issued by officials of the income tax department.

The advance tax is tax that you pay prior to the ending of the financial year. This is tax that you can pay in the form of installments or all at once, on specific dates that are issued by officials of the income tax department. The process of paying advance tax is quite a hassle free one. You can pay advance tax irrespective of whether you are a salaried person or a business professional or even a senior citizen for that matter. To know more about the payment of such tax, read on.

Advance Tax Payment Dates for 2022 – 2023

Due Date for Advance Tax Payment  Advance Tax Amount to be Paid

  • First Instalment- by 15th June every year you have to pay 15% of tax liability.
  • Second Instalment- by 15th September you have to pay 45% of tax liability.
  • Third Instalment- by 15th December you have to pay 75% of your tax liability.
  • The fourth Instalment- by 15th March you have to pay 100% of tax liability.

All about paying Advance Tax Online

Applicable for Persons with Tax Liabilities amounting to 10,000 INR or more 

If you are a person with tax liabilities of over 10,000 INR then paying advance tax does apply for you. You can also pay this tax if you run a business for which the annual turnover is more than 2 crore rupees.

Easy Payment Methods for Advance Tax

The payment of this tax is very simple as you just need to log into the IT website, click the Option of Paying Advance Tax, select challan 280 and fill it with the necessary details, and then get it paid by logging into your e banking account.

Some of the important details that you need to write down in challan 280 prior to making your payment include your PAN number, your email address and your mobile number. You also need to mention the assessment year and mention the details of tax deducted at source if this applies for you. The receipts for the tax payment are generated almost immediately and you need to save the receipt and keep it with you as proof of the fact that you have indeed made your payment. Procuring a duplicate receipt may not be possible so you need to keep the original payment receipt with you with care.

Read About: Common Mistakes to Avoid What Not To Do When E-Filing Your Income Tax Return

How can you Calculate Advance Tax?

  • Calculating advance tax is something that you can do in a matter of minutes as there is a calculator that you can use for such tax calculation.
  • The tax calculators online are those that you can use for free and the results that such calculators are known to generate are also likely to be 100% accurate.
  • It is always a good idea to calculate the advance tax at least 3 to 4 days ahead of making your tax payment so that you are absolutely sure of the amount that you need to pay.
  • Once the tax calculator generates a figure for you, you need to verify it over the next 2 to 3 days and then make your payment so that there are no errors as far as your tax payment is concerned.
  • You need to ensure that you are connected to high-speed internet when you do use such a calculator as it may not work well enough otherwise.
  • You can come across the advance tax calculator at any given time on any tax related website.
  • The tax calculator is ideally one that you should use in the late hours of the night if you want the website to be running fast and free from traffic at the time of using it.

Are there Penalties imposed on Late Payment of Advance Tax?

If you end up paying advance tax a few days later than the dates that are fixed by the income tax department then you will need to pay a penalty. Such a penalty is provided for by sections 23 4 B and 23 4 C of the Income Tax Act.

How to Avoid Advance Tax Payments?

If you want to avoid paying advance tax in the first place then you need to be transparent about any extra sources of income that you may have with your employer. Then the tax to be deducted from this additional income will be deducted from the source and you can refrain from paying any advance tax online or through an agent.

Read About: Why It Is Important to File Income Tax for Freelancers?

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