Advance Tax: Did you miss the advance tax deadline of March 15? If your annual tax liability is more than Rs 10,000, you pay it as advance tax in four installments instead of paying it in one go. But if you are a salaried employee, usually your tax is already deducted through TDS (Tax Deducted at Source)
Advance Tax: Did you miss the advance tax deadline of March 15? If your annual tax liability is more than Rs 10,000, you pay it as advance tax in four installments instead of paying it in one go. But if you are a salaried employee, usually your tax is already deducted through TDS (Tax Deducted at Source), so you do not need to pay advance tax separately. If you have any other income apart from your salary, then make sure to pay advance tax by March 15. If you forgot this, then request your employer to deduct more TDS before March 31. This can save you from interest. Know the details here.
When is it necessary to pay advance tax?
If you are getting any extra income other than salary, and your employer is not aware of it, then you will have to pay advance tax yourself. This income can be in any form, such as earnings from freelance or part-time work, rental income, profit from stock market or mutual fund or profit from selling a property.
If you have not paid advance tax on this extra income by March 15, then the Income Tax Department can charge you interest under section 234C and 234B.
Easy way to avoid interest
If you have not been able to pay advance tax by March 15, then there is no need to panic. You can avoid this interest by adopting one method. For this, you will have to inform your employer before March 31 and request them to deduct more TDS in the salary of March.
How to do it?
Between 16th and 31st March, tell your employer that you have earned income other than salary.
Ask them to deduct a little more TDS from your March salary so that the balance of advance tax is completed.
By doing this, interest under 234C and 234B can be avoided.
Will every employer do this?
Legally, the employer can do this, but some companies finalize tax related declarations in January-February itself, so it is possible that they may not accept your request in March.
If your salary is not high enough to deduct extra TDS from it, then this method will not work.
What if the employer does not agree?
If your employer does not deduct extra TDS in March, then you will have to pay the advance tax yourself before 31st March.
If you pay tax after March 31, then more interest will be charged under Section 234B from April 1.
