Don't Miss the Income Tax Deadline: Your Guide to Advance Tax for 2024-25
  • Deadline Looming: The clock is ticking! The deadline for the second instalment of advance tax for the assessment year 2024-25 is just around the corner, on Friday, September 15, 2023.

What Is Advance Income tax?

  • Paying Ahead: Advance tax is like paying for your income tax in advance rather than waiting until the end of the year.
  • Who Pays?: Anyone with an estimated tax liability of Rs 10,000 or more is required to pay advance tax.
  • Who’s In?: This includes salaried employees, self-employed folks, businesses, trusts, and partnerships.

Instalments of Advance Income tax:

  • Four-Part Payment: Advance tax is divided into four instalments throughout the year.
  • 1st Instalment: 15% due by June 15.
  • 2nd Instalment: 45% of the remaining advance tax by September 15.
  • 3rd Instalment: 75% of the remaining advance tax by December 15.
  • 4th Instalment: The final 100% due by March 15.
  • Special Case: Those using presumptive taxation (Section 44AD or 44ADA) pay it all at once by March 15.

Exemptions:

  • Senior Citizens: If you’re over 60 and don’t earn from business or profession, you’re exempt from paying advance tax.

Penalties for Late Payment:

  • Don’t Be Late: Missing the deadline for advance tax can lead to penalties.
  • Interest Penalty: You’ll pay a 1% interest penalty on the overdue amount, as per Sections 234B and 234C of the Income Tax Act, 1961.

Also Read  EPFO Portal Simplified – How to Lodge Complaints and Check Status

  • Stay Informed: Make sure to meet your tax obligations and deadlines to avoid unnecessary penalties and keep your finances in order.

FAQ: Income Tax and Advance Tax Payments

Q1: What is advance Income tax, and why do I need to pay it?

  • A: Advance tax is a pre-payment of your income tax, required if your estimated tax liability for the year is Rs 10,000 or more.

Q2: Who is responsible for paying advance Income tax?

  • A: Anyone falling into these categories must pay: salaried employees, self-employed individuals, businesses, trusts, and partnerships.

Q3: How many instalments are there for advance Income tax payments?

  • A: Advance tax is divided into four instalments in a year.

Q4: When are the advance tax instalments due?

  • A: Here are the deadlines:
    • 1st Instalment (15%): June 15
    • 2nd Instalment (45% of remaining tax): September 15
    • 3rd Instalment (75% of remaining tax): December 15
    • 4th Instalment (100% of remaining tax): March 15

Q5: What if I’m using a presumptive taxation scheme (Section 44AD or 44ADA)?

  • A: In this case, you must pay the entire advance tax in one go by March 15.

Q6: Who is exempt from paying advance tax?

  • A: Senior citizens aged 60 and above who do not have income from business or profession are exempt.

Q7: What happens if I miss the deadline for paying advance tax?

  • A: Failure to pay advance tax on time will result in an interest penalty of 1% on the overdue amount, as per Sections 234B and 234C of the Income Tax Act, 1961.

Q8: Why is it crucial to pay advance Income tax on time?

  • A: Paying advance tax on time ensures you avoid penalties and stay in compliance with tax regulations, keeping your financial matters in order.

Q9: Can I get more information about advance tax and tax regulations?

  • A: For detailed information and personalized advice, it’s advisable to consult with a tax professional or visit the official government tax website.

Q10: How do I calculate my estimated Income tax liability for the year?

  • A: To calculate your estimated tax liability, consider your income sources, deductions, and applicable tax rates. A tax advisor can help you with this calculation.

Q11: Can I make advance Income tax payments online?

  • A: Yes, you can make advance tax payments online through the government’s official tax payment portal or authorized banks. It’s a convenient and secure way to fulfill your tax obligations.

Q12: What if my income varies throughout the year? How do I calculate my advance tax accordingly?

  • A: If your income fluctuates, you can adjust your advance tax payments in the subsequent instalments based on your current income projections. Consult a tax expert for guidance on managing variable income.

Q13: Are there any consequences for underestimating my advance tax payments?

  • A: Underestimating your advance tax payments can lead to interest penalties. It’s essential to make a realistic estimation to avoid such penalties.

Q14: Is there a way to check my advance tax payment history or status?

  • A: Yes, you can check your advance tax payment history and status online through the official tax portal or consult with a tax professional for assistance.

Q15: What if I miss an instalment but catch up later in the year?

  • A: While it’s best to make timely payments, if you miss an instalment, you can make up for it in subsequent instalments. However, ensure you pay any interest penalties incurred.

Q16: How can I stay updated on Income tax deadlines and regulations?

  • A: To stay informed about tax deadlines and regulations, regularly check the official government tax website, subscribe to tax-related newsletters, or consult with a tax expert for guidance.

Q17: Can I seek an extension for advance tax payments in case of financial difficulties?

  • A: Extensions for advance tax payments are generally not granted. It’s advisable to plan your finances to meet the deadlines or consult with tax authorities for specific circumstances.

Q18: Are there any specific forms or documents required for advance tax payments?

  • A: Yes, you will need to use the prescribed forms for advance Income tax payments as per tax regulations. These forms are available on the official tax website.

Q19: What happens if I overpay advance Income tax?

  • A: If you overpay advance Income tax , you can claim a refund when you file your annual income tax return. Ensure you maintain accurate records of your payments for this purpose.

Q20: Where can I find more detailed information on advance tax rules and procedures?

  • A: You can find comprehensive information on advance tax rules and procedures in the Income Tax Act, 1961, or consult a tax professional for personalized guidance.

Leave a Reply

Your email address will not be published. Required fields are marked *