Advance tax payment deadline: The last date to pay advance tax is very near. If a person does not pay advance tax by March 15, he will have to pay interest on the tax amount. A taxpayer whose tax liability after deducting TDS and TCS is Rs 10,000 or more is required to pay advance tax.
We are at the end of the financial year 2023-24, which ends on March 31, 2024. It is important to pay the installments of advance tax for the financial year 2023-24 on time. All taxpayers have to deposit their income tax under the principle of ‘pay as you earn’. When the net tax liability of a taxpayer after deducting TDS and TCS is Rs 10,000 or more, it is mandatory for him to pay advance tax.
When is it necessary to pay advance tax ?
Advance tax is required to be deposited by all taxpayers whose income tax after adjusting TDS/TCS is Rs 10,000 or more. Senior citizens (above 60 years of age) are exempted from paying advance tax. The condition is that they should not have any income from any kind of business or profession.
How to calculate and pay advance tax liability ?​
Step 1: Choose the right tax regime
Individual and HUF taxpayers are required to calculate their income tax by selecting the new or old tax regime. If you do not know which tax regime is better for you, then calculate the income tax on your estimated income according to both the tax regimes and see how much less your income tax comes. The tax regime should remain the same as at the time of filing your income tax return. However, if you choose a different tax regime at the time of filing your income tax return and your income tax increases, you will have to pay interest on underpayment of advance tax.
Step 2: Adjust the tax credit of TDS and TCS available to you
Advance tax is calculated based on the estimated income of the financial year and the income tax rates. TDS/TCS credit is adjusted from the total tax amount. Now you can view TDS and TCS credit in your ‘Form 26AS’ till December 2023. To know the TDS and TCS amount for the period from January 1, 2024 to March 31, 2024, you need to contact your TDS deductor and TCS collector.
We can understand who is required to pay advance tax with an example. Suppose the tax of a person during a financial year is Rs 15,000 and if his TDS/TCS amount is Rs 5100 then his remaining tax will be Rs 9900 and it is not mandatory for him to pay advance tax. On the other hand, if TDS is Rs 4900 then the remaining tax amount comes to Rs 10,100. In this situation, it is necessary for the person to pay advance tax.
Step 3: Calculate advance tax installment
Advance tax has to be paid in four installments as per the due dates of the financial year and at detailed rates.
| Due Date | Complete % of Advance Tax Payable | If your Net Tax Liability after adjusting TDS/TCS and MAT comes to Rs. 1 Lakh |
| 15th June | 15% | Pay Rs. 15000 |
| 15th September | 45% | Pay Rs. 30000 (Total tax paid 45000) |
| 15th December | 75% | Pay Rs. 30000 (Total tax paid 75000) |
| 15th march | 100% | Pay Rs. 25000 (Total tax paid 100000) |
If you are into any business or profession and have opted for the presumption income tax (income tax) scheme under section 44AD or 44ADA of the Income Tax (Income Tax) Act, then you have to pay advance tax in only one installment (15th March). Is.
Step 4: How to pay advance income tax
Advance tax payment can be made using the ‘e-pay Tac service’ in the ‘Quick links’ section on the home page of the Income Tax portal (https://www.income.gov.in/iec/foportal/). Could. If your PAN is registered on the Income Tax portal, then you can also use the facility of ‘e-pay Tax’ under the ‘e-file’ section by logging into the Income Tax portal. While paying advance tax, select ‘Assessment Year 2024-25’ for the financial year 2023-24 and select ‘Advance Tax(100)’ under ‘Type of payment (Minor Head)’.
What happens if you do not pay advance tax ?​​
The Income Tax Department charges interest on the shortfall in advance tax. Interest is charged under Section 234B and Section 234C of the Income Tax Act. Therefore, if one does not pay advance tax or delays payment of advance tax then he has to pay more tax in the form of interest, and hence it is very important to calculate your advance tax correctly and pay it on time.
Section 234B: Interest has to be paid for shortfall in advance tax if the individual pays less than 90% of the income tax liability by 31st March before the end of the financial year. In this the interest rate is charged at the rate of 1% per month.
Section 234C: Under this Act, interest is based on four installments, i.e. 15th June, 15th September, 15th December and 15th March. The interest rate charged by the Income Tax Department is 1% per month.
Relief from advance tax interest ​
Since some incomes like capital gains, dividends, lottery winnings, etc. are difficult to estimate, whenever you receive such income, you have to pay full income tax on such income in your upcoming advance tax. Can pay with installment.
It is necessary to pay advance tax before March 15, 2024, but if you forget this date, then at least pay at least 90% of your income tax liability before March 31, 2024. In such a situation, you will be eligible for at least section 234B. You will be saved from paying interest under this.
