Final Up to date: March 12, 2024, 12:43 IST
The choice whether or not or to not pay advance tax is predicated in your annual earnings and tax legal responsibility. A taxpayer should pay advance tax as a way to keep away from penal curiosity if, after taking away tax deducted at supply (TDS), their yearly tax invoice for the monetary yr exceeds Rs 10,000.
In accordance with the Revenue-tax Act of 1961, people should pay their advance taxes on time to keep away from incurring penalties. Within the related monetary yr, the advance tax should be paid in 4 equal installments in June, September, December, and March. The deadline to pay the fourth installment of advance tax for FY 2023-24 is March 15, 2024.
The next are the deadlines and the quantities of advance tax that should be paid:
By June 15: Pay 15% of the estimated web tax legal responsibility.
By September 15: Pay 45% of the estimated web tax legal responsibility, minus any advance tax already paid.
By December 15: Pay 75% of the estimated web tax legal responsibility, minus any advance tax already paid.
By March 15: Pay 100% of the estimated web tax legal responsibility, minus any advance tax already paid.
Who’s excluded from paying advance tax?
Advance earnings tax is just not required for taxpayers who’ve chosen to take part within the presumptive taxation plan beneath part 44AD or 44ADA, or senior residents who don’t earn any earnings from a enterprise or career. Salaried people who’ve TDS deducted don’t have to pay any advance tax beneath most circumstances.
If an individual fails to pay their advance tax quantity and installments by the deadline, they are going to be topic to 2 totally different types of penalties (beneath sections 234C and 234B). If there may be any default within the advance tax cost, penal curiosity is assessed beneath part 234B of the Revenue Tax Act. If the advance tax cost is delayed, penal curiosity is assessed beneath part 234C.
Part 234C imposes a three-month curiosity cost at a fee of 1% every month. Penal curiosity shall be utilized beneath part 234B if a taxpayer has not paid advance tax or has paid lower than 90% of their particular person assessed tax.
