Advance Payment of Tax
Advance Payment of Tax
Advance Payment of Tax
Advance Payment of tax is another method of collection of tax by the Central Government in the
Form of Prepaid Taxes. Such advance tax is in addition to deduction of tax at source or
collection of tax at source. Scheme of advance payment of tax is also known as pay as you
earn scheme i.e., the assessee is required to pay tax during the course of earning of income in the
previous year itself, though such income in chargeable to tax during the assessment year.
Advance tax is payable on current income in installments during the previous year. If the income
tax liability of any assessee is more than Rs.10,000.00 in any financial year, then he is liable to
pay such tax in installments during the year itself rather than paying this tax at the end of the
year.
Amount Payable
Not less than 30% of the advance tax liability
On or before 15th
December
Not less than 60% of the advance tax liability as reduced by the amount if any, paid
in earlier installment
On or before 15th
March
100% of the advance tax liability as reduced by the amount if any, paid in earlier
installment
In case of Companies
Due Date
Amount Payable
On or before 15th Not less than 15% of the advance tax liability
June
On or before 15th Not less than 45% of the advance tax liability as reduced by the amount if any,
September
paid in earlier installment
On or before 15th Not less than 75% of the advance tax liability as reduced by the amount if any,
December
paid in earlier installment
On or before 15th 100% of the advance tax liability as reduced by the amount if any, paid in earlier
March
installment
Add:
Less:
Add:
Add:
Less:
Less:
Less:
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Interest on late
payment of
advance tax
If the income tax is
not payable as per
the above
schedule, interest
is liable to be paid
late payment of
advance tax as
follows :
1. Interest
under
section
234C Interest @
1% p.m. is
payable if
the tax is
not paid as per the above schedule, i.e. for Deferment of advance tax.
2. Interest under section 234B - Interest @ 1% p.m. is payable if 90% of the tax is not paid
before the end of the financial year, i.e. default in payment of advance tax.
Advance Tax could be paid using a Tax Payment Challan at designated branches of banks
empanelled with the Income Tax Department. Branches of ICICI, HDFC and SBI accept
Advance Tax Payment Challans. Alternatively, individuals could pay Advance Tax online
through the Income Tax Dept / NSDL website.
https://onlineservices.tin.nsdl.com/etaxnew/tdsnontds.jsp and use CHALLAN NO. /ITNS 280