Advance Tax in India
Where the estimated tax payable by any person in India exceeds INR 10,000/- after deducting TDS, advance tax is required to be paid on such tax payable. Under advance tax, the estimated tax liability of a person is required to be paid in four instalments during the financial year (‘FY’) under consideration.
Person for the purpose of advance tax includes all taxpayers – individuals (salaried, professional, business) and companies.
The due date for payment of advance tax for both – corporates & individuals is as under:
| Advance Tax Due Dates | Advance Tax Payable |
| On or before 15th June | 15% |
| On or before 15th September | 45% |
| On or before 15th December | 75% |
| On or before 15th March | 100% |
If a person is assessable under s. 44AD or s. 44ADA of the Income Tax Act 1961 (‘ITA’) i.e the presumptive taxation scheme, 100% of the estimated tax is required to be paid as advance tax on or before 15th March of the FY.
It is pertinent to note that any amount of advance tax paid which exceeds the tax liability which arises at the time of filing the tax returns at the end of the year, the excess amount is refundable.
Interest
s.234B (interest for non payment of advance tax) of the ITA becomes applicable if 90% of the advance tax due is not paid by the financial year end. Interest at 1% is chargeable.
s.234C (interest for deferred payment of advance tax) of the ITA becomes applicable if tax is not paid as per the timelines prescribed in the table above. Interest at 1% is chargeable.
How to pay Advance Tax?
- Estimated tax liability to be calculated using tax slabs, tax rates, surcharge, cess at applicable rate
- Pay taxes online on https://www.tin-nsdl.com/services/oltas/e-pay.html using ITNS 280 challan.
- Fill in the details - Name, PAN, Assessment Year and for type of payment, select ‘100’ advance tax. Advance Tax can be paid using Net banking or debit/credit cards.
- On the payment of advance tax, a tax payment challan will be generated which will contain the challan number. This challan number is to be quoted in order to claim credit of the advance tax so paid.