Advance tax deposit online: The second installment of advance tax needs to be paid before September 15, 2024

Advance tax deposit online: How to pay advance tax online for AY 2024-25? The payment can be made either online or offline. The advance tax is required to be paid in four installments, with the 15th of the last month of each quarter being the deadline

The second advance tax installment must be paid by September 15, 2024. You can make the payment online or offline. The advance tax should be paid in four installments, with the deadline being the 15th of the last month of each quarter.

All taxpayers with estimated tax dues of Rs 10,000 or more (after deducting TDS from the previous year) are required to pay advance tax under section 208 of the Income Tax Act, 1961.

Advance tax: Who has to pay, penalty for missing last date

What is advance tax?

Income tax paid in advance during the fiscal year rather than at the end of the year is known as advance tax. Tax laws stipulate the specific timing for making these payments. Throughout the fiscal year, advance tax is paid in installments. Another term for advance tax is "pay as you earn" tax.

Who has to pay advance tax

As per section 208, every person whose estimated tax liability for the year is Rs. 10,000 or more, shall pay his tax in advance, in the form of "advance tax".

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How to pay advance tax

Step 1: Visit Income tax website https://www.incometax.gov.in/iec/foportal/
Step 2: Click on e-Pay tax, enter PAN, mobile number and click continue. Enter OTP received on registered mobile number
Step 3: Click on Advance tax
Step 4: Select assessment year, and select advance tax from drop down
Step 5: Enter tax amount and continue. Select payment options and click continue
Step 6: Click on Pay Now to make payment.

Who does not have to pay advance tax

However, the income tax department's website states that a resident senior citizen, i.e., an individual of the age of 60 years or above during the relevant financial year who did not earn any income from business or profession, is not liable to pay advance tax.

What is the penalty for missing advance tax payment

Penal interest under sections 234B and 234C is applicable for default in payment of advance tax A penal interest of 1% per month or part thereof is levied in each section. Section 234B is levied for delays in advance tax payment or shortfall in tax payment. Section 234C is applicable for non payment or short payment of individual advance tax instalments.

Failure to pay advance tax or providing inaccurate estimates for advance tax could result in receiving a notice from the Income-tax Department. Consequently, not paying advance tax may lead to the imposition of interest and penalties.

Advance tax due dates

On or before June 15 of each fiscal year, 15% of the advance tax must be paid.
On or before September 15, 45% of the advance tax (less tax previously paid) must be paid.
On or before December 15th, 75% of the advance tax (minus tax already paid) is due.
On or before March 15th, 100% of the advance tax (minus tax already paid) is due.
For taxpayers who have selected the presumptive taxation system, the whole amount of advance tax must be paid on.

Benefits of paying advance tax

According to the Kotak Mahindra website, these are the benefits of paying advance tax on time:

Advance tax payment reduces the chances of taxpayers being penalized with interest due to tax payment default.
Paying taxes in installments rather than all at once helps manage finances better. Taxpayers do not have to bother about last-minute tax payments.
Advance tax payments provide a continuous flow of income to the Government throughout the year.

This story originally appeared on: India Times - Author:Faqs of Insurances