What is Advance Income Tax?
Advance Income Tax payment means to pay the part of your yearly taxes in advance to government. It is obligatory to pay advance tax in every case where the advance tax payable is Rs.10,000 or more. Advance tax should be paid in the year in which the income is received.
Advance Tax Applicable if = Tax Payable ≥ 10000/-
Income Liable for Advance Tax
Under the scheme of advance tax payment of tax, every income (including capital gains, winnings from lotteries, crossword puzzles, etc.) is liable for payment of advance tax.
Advance Tax Due Dates FY 2020-21
| Due Date | Advance Tax Payable |
| On or before 15th June | 15% of advance tax |
| On or before 15th September | 45% of advance tax |
| On or before 15th December | 75% of advance tax |
| On or before 15th March | 100% of advance tax |
What is the Interest on Late Payment of Advance Tax?
Interest under section 234C – Interest @ 1% per month is payable if the tax is not paid as per the above schedule i.e. for Deferment in Installments of Advance Tax
Interest under section 234B – Interest @ 1% is payable if 90% of the tax is not paid before the end of the financial year i.e. for Default in Payment of Advance Tax
Other Important Points regarding Advance Tax
- Where tax paid under advance tax is more then Income Tax Liability, assessee can claim Refund of Income Tax by furnishing the details of tax deposited
- Online Payment of taxes is compulsory for all companies as well as for taxpayers liable to tax audit.
- After making the payment of 1st or 2nd or 3rd installment of advance tax (as the case may be), if there is a change in the tax liability, then the taxpayer can revise the quantum of advance tax in the remaining installments and pay the tax as per revised estimates.
- The advance tax collections also help the Govt in ascertaining the growth of the economy
- Link to Pay Tax Online – challan No. 280
https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp
