Advance Tax Due Dates

Applicability of Advance Tax

Advance tax is applicable to all taxpayers whose income tax payable is more than Rs. 10,000. Hence, advance tax requirements are applicable for salaried employees, professionals, freelancers or businessmen. Advance tax is normally not required for salaried employees if the employer deducts tax at source or TDS. However, if the employee has additional sources of income on which TDS has not been deducted, then the taxpayer faces the need for advance tax payments on the estimated total income. It is important to pay advance tax before the last advance tax dates. Examples of such additional income could include capital gains on shares or house property, interest on investments, etc.

Advance Tax Payment Due Dates

Advance Tax payment dates for the financial year of the income tax and it is calculated under two sections: Section 234B and Section 234C.

Section 234B

Under Section 234B, if the tax is more than Rs. 10,000, then the taxpayer has to pay 90% of the amount before the 31st of March.

Section 234C

Under section 234C, the tax has to be paid on advance tax dates in four divisions. The advance tax payment due date is as follows:

Taxpayer Type	By 15th June	By 15th September	By 15th December	By 15th March
All types of taxpayers (other than those who opted for presumptive taxation scheme)	Upto 15% of advance tax	Upto 45% of advance tax	Upto 75% of advance tax	Upto 100% of advance tax
Taxpayers who opted for the presumptive taxation scheme	NIL	NIL	NIL	Upto 100% of advance tax

Any tax paid by a taxpayer till 31st March will be treated as advance tax. If the last day for payment of any instalment of advance tax is a day on which the banks are closed, then the taxpayer should pay the advance tax on the immediately following working day. If a taxpayer fails to pay the advance tax as per the schedule above, it becomes necessary to be levied 1% interest to every per cent of the amount that has to be paid in that time period. Know the procedure for making advance tax payment.

Calculation of Interest

The interest for Section 234C is levied on the taxpayers if the instalment paid for the tax is less than the required amount. The interests can be calculated under two schemes. They are:

For taxpayers under presumptive taxation scheme (Section 44AD)

Interest will be levied if the Advance Tax paid on or before 15th March is less than 100% of the required sum.

For any other taxpayer

For other taxpayers, the interest is calculated according to the following methodology:

• If the taxpayer pays the Advance Tax on or before 15th June, the applicable interest rate shall be less than 12%
• If the taxpayer pays the Advance Tax on or before 15th September, the applicable interest rate shall be less than 36%
• If the taxpayer pays the Advance Tax on or before 15th December, the applicable interest rate shall be less than 75%
• If the taxpayer pays the Advance Tax on or before 15th March, the applicable interest rate shall be less than 100%

Know more about the penalty for not paying advance tax.

FAQs

1. What is Advance Tax?

Advance Tax is a mechanism where taxpayers pay their income tax in instalments based on their estimated annual income, instead of paying it all at once at the end of the financial year.

2. Who is required to pay Advance Tax?

Advance tax is applicable to taxpayers whose total tax liability exceeds Rs. 10,000, including salaried employees with additional income, professionals, freelancers, and businessmen.

3. Do salaried employees need to pay Advance Tax?

Generally, salaried employees are not required to pay advance tax if their employer deducts TDS. However, if they have additional income sources without TDS, they must pay advance tax on ore before the advance income tax date.

4. What are the Advance Tax Last Dates?

The advance tax due dates for individuals as well as advance tax due dates for companies are given below:

• 15th June – 15% of total tax
• 15th September – 45% of total tax
• 15th December – 75% of total tax
• 15th March – 100% of total tax

5. What happens if the Advance income tax date falls on a bank holiday?

If the Advance tax last date falls on a day when the banks are closed, the payment can be made on the next working day.

6. What is the penalty for not paying on or before the Advance Tax deadline?

If the taxpayer fails to pay the required tax on or before the advance tax deadline, interest under Section 234C will be levied, which is 1% per month for each missed instalment.

7. What is the difference between Section 234B and Section 234C?

Section 234B requires payment of 90% of the tax by 31st March, while Section 234C specifies advance tax instalments for different dates, based on taxpayer type and presumptive taxation schemes.

8. How is interest calculated under Section 234C?

Interest under Section 234C is charged if the taxpayer's instalment is less than the required amount, with rates increasing depending on the missed instalment period.

9. What is the Presumptive Taxation Scheme and does it affect Advance Tax payments?

Taxpayers under the Presumptive Taxation Scheme (Section 44AD) are exempt from paying advance tax in the first three instalments, but must pay the full amount by 15th March.

10. How is interest calculated for taxpayers under the Presumptive Taxation Scheme?

Taxpayers under the Presumptive Taxation Scheme will incur interest if the total Advance Tax paid by 15th March is less than the required 100% of the tax amount.

About the Author

BENNISHA THURAI C
Post By IndiaFilings.

Updated on: January 24th, 2025