Income tax alert: Hurry up! Advance tax last instalment deadline ends today

What is advance tax?

Advance tax refers to the income tax amount that is required to be paid in installments according to specified due dates, rather than in a single lump sum.

Both individuals and businesses are obligated to pay income tax in advance through periodic installments, rather than in one consolidated payment.

Here are the deadlines for advance tax payments:

June 15: Pay 15% of the advance tax.

September 15: Pay 45% of the advance tax, subtracting any already paid.

December 15: Pay 75% of the advance tax, subtracting any already paid.

March 15: Pay the remaining balance of the advance tax, subtracting any already paid.

Who has to pay advance tax?
 

“Any taxpayer whose tax liability, after reducing TDS and TCS, exceeds ₹10,000, is required to pay advance tax in four installments. If there’s a shortfall in any installment, it must be compensated in the subsequent one. Therefore, if you haven’t paid any installment for the current year, you can settle the entire advance tax liability by March 15th,” explained Balwant Jain, a tax and investment expert based in Mumbai.

What happens if taxpayers fail to pay advance tax?

Not paying advance tax on time will lead to interest charges as per sections 234B and 234C of the Income Tax Act, 1961. It’s crucial to make prompt payments to avoid penalties.

“If you delay or fall short in paying advance tax, you’ll incur interest at a rate of 1% per month. Since the next installment is due after three months, any delay, even just one day beyond the due date, incurs interest for the entire three months. For instance, if your advance tax liability is Rs. 1 lakh and you fail to pay the Rs. 15,000 due on June 15th, you’ll have to pay an interest of Rs. 450 for that default, even if paid on June 16th,” Jain explained.

Here’s how to pay advance tax online:

Visit the income tax website.

Select ‘e-pay tax.’

Enter your PAN and password.

Click on “Advance Tax” and choose your preferred payment method.

Complete the payment by clicking the “Pay Now” button.

Once the payment is processed, you’ll receive a receipt as confirmation of your payment.

On Monday, the income tax department found errors in securities market data from a reporting entity’s financial transactions statement. These issues were noticed thanks to feedback from taxpayers during the advance tax e-campaign.

“Based on feedback from taxpayers on the e-campaign for Advance Tax, the Department has identified certain inconsistencies in the data of the securities market (SFT-17) provided by one of the Reporting Entities. The reporting entity has been asked to submit a revised statement based on updated information. Hence, the data on AIS will be updated. Taxpayers are advised to wait for further updates on AIS based on the revised statement, the income tax department posted on X.