Advance tax : What is the due date for payment of advance tax

Advance tax

What is advance tax?

As the name itself suggest, advance tax is the income tax which is required to be paid in advance. Accordingly, a person who falls under the criteria given for payment of advance tax then he/she will have to pay his/her income tax in advance. “Advance” here means that the tax for a financial year is paid in the same financial year and not in the assessment year. Generally, tax for a financial year is paid in the next financial year (i.e. assessment year), but those persons who fall under the limits specified for the payment of advance tax (section 208 of the Income Tax Act) will be required to pay tax in advance.

Who is required to pay advance tax?

Under Section 208 of the Income Tax Act, any person (individual / company / LLP / partnership / Trust) whose estimated income tax liability for the year exceeds ₹10,000 will be required to pay advance tax. However, a Senior Citizen (i.e. An individual over 60 years of age), not having income from business or profession is exempted from making advance tax payment.

How much advance tax is required to be paid?

The whole of the estimated tax liability is required to be paid as advance tax. However, certain percentages have been specified along with the due dates upto which the same has to be paid.

What is the due date for payment of advance tax?

The due dates along with the percentage of tax required to be paid upto their respective due dates have been specified as under:-

For both individuals and corporate tax payers:-

Due Date	Advance Tax Payable
On or before 15th June	15% of advance tax
On or before 15th September	45% of advance tax less advance tax already paid
On or before 15th December	75% of advance tax less advance tax already paid
On or before 15th March	100% of advance tax less advance tax already paid

For taxpayers who have opted for Presumptive Taxation Scheme under section 44AD & 44ADA:-

Due Date	Advance Tax Payable
On or before 15th March	100% of advance tax

 

What are the consequences of non payment/short payment of advance tax?

The non-payment or short payment of advance tax will attract penal provisions under sections 234B & 234C of the Income Tax Act. Accordingly:-

• As per section 234B, if there is no payment of advance tax or the advance tax paid is less than 90% of the assessed tax, then interest for default in payment of advance tax is levied at 1% simple interest per month or part of a month from 1st April of the relevant financial year till the date of determination of income under section 143(1) or when a regular assessment is made, then till the date of such a regular assessment, on the amount of unpaid advance tax. If there is a shortfall in payment of advance tax, then interest is levied on the amount by which advance tax is short paid.
• As per section 234C, if a taxpayer has paid advance tax which is less than the required amount, he shall be liable to pay simple interest at the rate of 1% per month or part of the month for short payment or non-payment of individual instalment(s) of advance tax. Since, advance tax is paid based on an estimated tax liability, only tax payment that falls below the threshold below will be liable for penalty for Section 234C of the IncomeTax Act.Penal interest under Section 234C is levied only if:
  • Advance tax paid on or before 15th June is less than 12% of advance tax payable.
  • Advance tax paid on or before 15th September is less than 36% of advance tax payable.
  • Advance tax paid on or before 15th December is less than 75% of advance tax payable.
  • Advance tax paid on or before 15th March is less than 100% of advance tax payable.

For taxpayers enrolled under the presumptive taxation scheme, penalty under Section 234C will be levied only if advance tax paid on or before 15th March is less than 100% of advance tax payable.

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