Advance Tax: If your tax liability is Rs 10,000 or more, it is mandatory to pay the last installment of advance tax by March 15, 2025. This is an important tax liability under the Income Tax Act, from which the government gets tax in the same financial year in which the income is generated
Advance Tax: If your tax liability is Rs 10,000 or more, it is mandatory to pay the last installment of advance tax by March 15, 2025. This is an important tax liability under the Income Tax Act, from which the government gets tax in the same financial year in which the income is generated.
Who pays advance tax?
All salaried employees, whose income comes from rent, capital gains or interest income other than salary.
People involved in business and self-employment also have to pay advance tax.
Senior citizens above 60 years of age, whose income is not from business or profession, are exempted from advance tax.
Salaried employees whose total tax liability is deducted through TDS (Tax Deducted at Source) are not required to pay advance tax.
When is advance tax payment required?
15 June – 15% of total tax liability
15 September – 45% of total tax liability (including first instalment)
15 December – 75% of total tax liability (including first and second instalments)
15 March – 100% of total tax liability
How to make payment?
E-payment is mandatory for corporate taxpayers and taxpayers whose accounts are required for audit under section 44AB.
Other taxpayers can also make online payment, which will save time and simplify the process.
Penalty for not paying advance tax
If a taxpayer does not pay advance tax on time, interest will have to be paid under sections 234B and 234C of the Income Tax Act.
Under 234C, if someone does not pay tax on time, 1% monthly interest will be charged on the outstanding amount.
Under 234B, if 90% of the total tax is not deposited by March 15, then interest at the rate of 1% monthly will be charged on the outstanding amount until the entire tax is paid.
What to do?
If you have not paid advance tax yet, make your payment before the deadline of March 15 to avoid interest and penalty.
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