Advance tax: If you also have to deposit advance tax, then 15th December is very important for you. The second installment of advance tax for the third quarter of the financial year 2024 has to be deposited by December 15. If you fail to pay advance tax then you will have to pay penalty.
Income Tax Rules: If you also have to deposit advance tax, then 15th December is very important for you. The second installment of advance tax for the third quarter of the financial year 2024 has to be deposited by December 15. If you fail to pay advance tax then you will have to pay penalty. Not only this, you will also have to pay interest for delay. Let us know what is advance tax and when in a year you have to pay it.
What is advance tax?
Advance tax is a type of income tax, which has to be deposited with the Income Tax Department before the end of the financial year. It is not paid in lump sum on annual basis like normal tax, but is deposited in instalments. Under this, taxpayers deposit taxes in advance with the Income Tax Department.
Who has to pay advance tax?
According to Section 208 of the Income Tax Act, advance tax has to be paid by those people whose tax liability is more than Rs 10,000. This applies to employed people, freelancers, businessmen and people who earn money in some other way. However, if your age is more than 60 years, those who do not do any kind of business are exempted from advance tax.
When is advance tax to be paid?
Advance tax does not have to be paid in lump sum once a year like normal tax, but has to be paid in installments. It has to be paid every quarter. Its date is decided by the Income Tax Department. For the financial years 2022-23 and 2023-24, these dates are 15 June, 15 September, 15 December and 15 March.
How much advance tax has to be paid?
Even though advance tax is paid in installments, it is calculated for the entire year. You will have to calculate in advance how much tax you may have to pay in a year. After removing deductions from your income, you can calculate tax on the remaining income as per your tax slab.
After this, you will have to pay at least 15 percent of your advance tax on June 15. Whereas 45 percent of advance tax has to be paid by 15 September, 75 percent of advance tax by 15 December and 100 percent of advance tax has to be paid by 15 March.
What will happen if advance tax is not paid?
In the case of employed people, in case of change of job, TDS is often not deducted properly by the companies and advance tax liability is created. In such a situation, you will have to check and deposit the advance tax, otherwise a charge will be levied on you and you will also have to pay interest. If there is default in payment of advance tax, penalty is imposed under section 234B and 234C. Penalty interest of 1% is charged every month on each section. Section 234B is imposed for delay in payment of advance tax or shortfall in tax payment. Whereas Section 234C applies to non-payment or short payment of individual advance tax installments.
