About advance tax, its applicability and the online payment method

Pay tax online

What is Advance Tax? 

Income tax payments made during the year rather than at the end of the year are called advance tax. It is paid at regular intervals and as per the tax liability of the person paying it. There are specific rules and regulations in the Income Tax Act which define who is required to pay advance tax, in what proportion and by when.

Also Read: You cannot pay direct taxes through the TIN-NSDL website if you use one of these banks

Things You Should Know about Advance Tax

Advance tax is paid by every person with an estimated tax liability of Rs 10,000 or more. However, senior citizen resident individuals are not liable to advance tax if he or she doesn’t have any income from business or profession. Thus, salaried taxpayers, freelancers, businessperson and any other self-employed professionals are required to pay advance tax. 

If someone is liable to pay advance income tax but fails to do so on time, interest under sections 234B and 234C becomes applicable.

Also Read: New income tax portal. Now you can pay income tax online using UPI, credit card and other payment

When to Pay Advance Tax?

Taxpayers who file their returns under the presumptive taxation scheme under section 44AD, and independent professionals filing returns under the presumptive scheme under section 44ADA are required to pay advance tax in one instalment on or before 15th March. Anyone else who is liable to pay advance tax must follow the four due dates stipulated during the year.

By 15th June – Advance tax payment of a minimum of 15% of estimated tax liability

By 15th September – Advance tax payment of a minimum of 45% of estimated tax liability

By 15th December – Advance tax payment of a minimum of 75% of estimated tax liability

By 15th March – Advance tax payment of a minimum of 100% of estimated tax liability

Any tax paid till the 31st of March is considered to be an advance tax payment. If the aforementioned due dates fall on a bank holiday, the payment of advance tax must be made on the following working day. 

Also Read: How to get a certificate to claim tax deductions for medical expenses under section 80ddb of Income Tax Act

How to Pay Advance Tax Online?

To pay advance tax online, you must follow the below steps,

  • Visit the income tax online payment portal,
  • Select the challan number for advance tax payment. For instance, individual taxpayers must choose challan no 280,
  • Select the type of payment as “Advance Tax”,
  • Fill in the address, assessment year, mode of payment and other necessary details, and then proceed,
  • Make the payment after the webpage is redirected to the online payment page,
  • Save the payment challan.

Apart from the online payment mode, payments can also be made by submitting the challan at bank branches authorized by the income tax department.

Thus, advance tax payments can be conveniently made online as well as offline. Do ensure that you pay on time and avoid penal interests.