Advance tax: Last instalment deadline on March 15. Know who all need to file
The Income-Tax Act 1961 clearly states that individuals need to make payments of advance tax following a specified schedule to avoid penalties. The advance tax needs to be paid in four instalments.
- Mar 13, 2024,
- Updated Mar 13, 2024 4:15 PM IST
Advance tax is the tax that taxpayers need to pay in advance instead of paying it in one go at the year's end. If a taxpayer's estimated annual tax liability for any given financial year after subtracting tax deducted at source (TDS) exceeds Rs 10,000, then he or she has to pay advance tax. It is also called the tax that you pay as you earn.
The Income-Tax Act 1961 clearly states that individuals need to make payments of advance tax following a specified schedule to avoid penalties. The advance tax needs to be paid in four instalments. The deadlines are in June, September, December and March.
The last deadline for this fiscal year is March 15. Therefore, it means taxpayers have just two days left to pay the fourth and final instalment of advance tax. Missing the payment deadline would mean the taxpayers will be liable to penalties under Sections 234B and 243C.
Who all need to file advance taxes
1. The Income-tax Act, 1961, says if an individual has an estimated annual tax liability after deducting tax deducted at source (TDS) of more than Rs 10,000, then advance tax needs to be paid. For those who are not sure how much advance tax needs to be paid on the transactions undertaken by them, they should go to the compliance portal to ascertain the amount.
2. NRIs, who have an income accruing in India in excess of Rs 10,000, are liable to pay advance tax.
3. Resident senior citizens not having income from business or profession are not liable for advance tax.
Deductions under Section 80 C
One can compute deductions under Section 80 C while estimating the payable advance tax liability.
Penalties on non-payment of advance tax
As per Section 234B, taxpayers must pay at least 90% of the total taxes as advance tax by March 31 of any fiscal year. Failure to make advance tax payments will result in an interest @1% on the unpaid amount.
If someone misses the payment of advance tax or delay the payment, it will attract interest under 234C:
| Particulars | Rate of Interest | Period of Interest | Amount on which interest is calculated |
| If Advance Tax paid by 15th June is less than 15% | 1% per month | 3 months | 15% of Amount* (-) tax paid before June 15 |
| If Advance Tax paid by 15th September is less than 45% | 1% per month | 3 months | 45% of Amount* (-) tax paid before September 15 |
| If Advance Tax paid by 15th December is less than 75% | 1% per month | 3 months | 75% of Amount* (-) tax paid before December 15 |
| If Advance Tax paid by 15th March is less than 100% | 1% per month | 1 month | 100% of Amount* (-) tax paid before March 15 |
How to file advance taxes?
Visit I-T department's e-filing portal Click on e-tax portal Enter PAN in the given box and re-enter it to confirm the same Enter mobile number; click on Continue Enter six-digit OTP received on your mobile number; click on Continue Click on proceed under the first box labelled Income Tax Select assessment year as 2024-25 and select type of payment as Advance Tax; click on Continue Enter all the text details; click on Continue Select a suitable payment method; press continue Once payment is complete, an acknowledgement will appear on the next screen; save this text receipt for future reference and while filing ITR.
Advance tax is the tax that taxpayers need to pay in advance instead of paying it in one go at the year's end. If a taxpayer's estimated annual tax liability for any given financial year after subtracting tax deducted at source (TDS) exceeds Rs 10,000, then he or she has to pay advance tax. It is also called the tax that you pay as you earn.
The Income-Tax Act 1961 clearly states that individuals need to make payments of advance tax following a specified schedule to avoid penalties. The advance tax needs to be paid in four instalments. The deadlines are in June, September, December and March.
The last deadline for this fiscal year is March 15. Therefore, it means taxpayers have just two days left to pay the fourth and final instalment of advance tax. Missing the payment deadline would mean the taxpayers will be liable to penalties under Sections 234B and 243C.
Who all need to file advance taxes
1. The Income-tax Act, 1961, says if an individual has an estimated annual tax liability after deducting tax deducted at source (TDS) of more than Rs 10,000, then advance tax needs to be paid. For those who are not sure how much advance tax needs to be paid on the transactions undertaken by them, they should go to the compliance portal to ascertain the amount.
2. NRIs, who have an income accruing in India in excess of Rs 10,000, are liable to pay advance tax.
3. Resident senior citizens not having income from business or profession are not liable for advance tax.
Deductions under Section 80 C
One can compute deductions under Section 80 C while estimating the payable advance tax liability.
Penalties on non-payment of advance tax
As per Section 234B, taxpayers must pay at least 90% of the total taxes as advance tax by March 31 of any fiscal year. Failure to make advance tax payments will result in an interest @1% on the unpaid amount.
If someone misses the payment of advance tax or delay the payment, it will attract interest under 234C:
| Particulars | Rate of Interest | Period of Interest | Amount on which interest is calculated |
| If Advance Tax paid by 15th June is less than 15% | 1% per month | 3 months | 15% of Amount* (-) tax paid before June 15 |
| If Advance Tax paid by 15th September is less than 45% | 1% per month | 3 months | 45% of Amount* (-) tax paid before September 15 |
| If Advance Tax paid by 15th December is less than 75% | 1% per month | 3 months | 75% of Amount* (-) tax paid before December 15 |
| If Advance Tax paid by 15th March is less than 100% | 1% per month | 1 month | 100% of Amount* (-) tax paid before March 15 |
How to file advance taxes?
Visit I-T department's e-filing portal Click on e-tax portal Enter PAN in the given box and re-enter it to confirm the same Enter mobile number; click on Continue Enter six-digit OTP received on your mobile number; click on Continue Click on proceed under the first box labelled Income Tax Select assessment year as 2024-25 and select type of payment as Advance Tax; click on Continue Enter all the text details; click on Continue Select a suitable payment method; press continue Once payment is complete, an acknowledgement will appear on the next screen; save this text receipt for future reference and while filing ITR.