Last Updated: March 12, 2024, 12:43 IST
The determination whether or not or to not pay advance tax relies in your annual earnings and tax legal responsibility. A taxpayer should pay advance tax with the intention to keep away from penal curiosity if, after taking away tax deducted at supply (TDS), their yearly tax invoice for the monetary 12 months exceeds Rs 10,000.
In accordance with the Income-tax Act of 1961, people should pay their advance taxes on time to keep away from incurring penalties. In the related monetary 12 months, the advance tax should be paid in 4 equal installments in June, September, December, and March. The deadline to pay the fourth installment of advance tax for FY 2023-24 is March 15, 2024.
The following are the deadlines and the quantities of advance tax that should be paid:
By June 15: Pay 15% of the estimated internet tax legal responsibility.
By September 15: Pay 45% of the estimated internet tax legal responsibility, minus any advance tax already paid.
By December 15: Pay 75% of the estimated internet tax legal responsibility, minus any advance tax already paid.
By March 15: Pay 100% of the estimated internet tax legal responsibility, minus any advance tax already paid.
Who is excluded from paying advance tax?
Advance earnings tax isn’t required for taxpayers who’ve chosen to take part within the presumptive taxation plan underneath part 44AD or 44ADA, or senior residents who don’t earn any earnings from a enterprise or career. Salaried people who’ve TDS deducted don’t have to pay any advance tax underneath most circumstances.
If an individual fails to pay their advance tax quantity and installments by the deadline, they are going to be topic to 2 totally different types of penalties (underneath sections 234C and 234B). If there may be any default within the advance tax cost, penal curiosity is assessed underneath part 234B of the Income Tax Act. If the advance tax cost is delayed, penal curiosity is assessed underneath part 234C.
Section 234C imposes a 3-month curiosity cost at a price of 1% every month. Penal curiosity shall be utilized underneath part 234B if a taxpayer has not paid advance tax or has paid lower than 90% of their particular person assessed tax.
