Advance tax is a significant aspect of India’s tax system, ensuring timely tax payments throughout the year. For individuals and businesses with an annual tax liability of ₹10,000 or more, advance tax payments are mandatory. Missing these deadlines, such as the upcoming one on December 15, 2024, can result in penalties under the Income Tax Act. Here’s an in-depth guide to advance tax, payment deadlines, and how to ensure compliance.
What Is Advance Tax?
Advance tax is the income tax paid in installments throughout the year as income is earned, instead of waiting until the financial year ends. This system applies to:
- Salaried individuals
- Freelancers
- Business owners
Advance tax payments are structured into four installments to distribute the tax burden evenly.
Advance Tax Payment Schedule for FY 2024-25
Below is the schedule for advance tax payments for the financial year 2024-25:
| Due Date | Installment | Percentage of Tax Liability |
|---|---|---|
| On or before June 15, 2024 | First installment | 15% |
| By September 15, 2024 | Second installment | 45% (less amount already paid) |
| By December 15, 2024 | Third installment | 75% (less amount already paid) |
| By March 15, 2025 | Fourth installment | 100% (less amount already paid) |
Upcoming Deadline: December 15, 2024
The next deadline for advance tax payment is December 15, 2024. However, as the date falls on a Sunday, the payment can be made on the next working day, December 16, 2024, without any penalties or interest.
The Income Tax Department clarifies that if the due date falls on a public holiday, the next business day will serve as the effective deadline. This provision is backed by a circular issued in January 1994, ensuring taxpayers are not penalized when deadlines coincide with non-working days.
Consequences of Missing the Deadline
Failure to meet advance tax deadlines may lead to:
- Interest under Section 234B: Charged for non-payment of 90% of the assessed tax by March 15.
- Interest under Section 234C: Imposed for delayed installment payments.
Steps to Pay Advance Tax Online
Follow these steps to make an online advance tax payment:
- Visit the Income Tax Department’s e-filing portal.
- Click on ‘e-Pay Tax’ in the ‘Quick Links’ section.
- Enter your PAN and verify it along with your mobile number.
- Input the OTP received on your registered mobile number.
- Select the appropriate tax category under ‘Income Tax.’
- Choose ‘100’ for ‘Advance Tax for 100’ as the payment type.
- Enter the tax amount and preferred payment method.
- Verify the challan details and click on ‘Pay Now.’
- Save the tax receipt for future reference.
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Disclaimer
This article is for informational purposes only and does not constitute tax or legal advice. Consult a tax professional for personalized guidance.