DON’T MISS THE CHANCE PAY YOUR ADVANCE TAX AND BE THE FUEL BEHIND VIKSIT BHARAT MOVEMENT

The third installment of Advance Tax for FY 2024-25 is due by 15th December 2024. Paying on time not only upholds your compliance with tax regulations but also strengthens the ‘Viksit Bharat Movement’, contributing to India’s vision of self-reliance and prosperity.

Salaried individuals, freelancers and businesses– If your total tax liability is Rs 10,000 or more in a financial year, you have to pay advance tax. The advance tax applies to all taxpayers, salaried individuals, freelancers, and businesses.

Senior citizens– People aged 60 years or more who do not run a business are exempt from paying advance tax. So, only senior citizens (60 years or more) having business income must pay advance tax.

Presumptive income for businesses–The taxpayers who have opted for the presumptive taxation scheme under section 44AD have to pay the whole amount of their advance tax in one instalment on or before 15th March. They also have the option to pay all of their tax dues by 31st March.

Presumptive income for professionals– Independent professionals such as doctors, lawyers, architects, etc. come under the presumptive scheme under section 44ADA. They have to pay the whole of their advance tax liability in one instalment on or before 15th March. They can also pay the entire amount by 31st March.

Advance Tax Due Dates For FY 2024-25

FY 2024-25 for both individual and corporate taxpayers

Due DateAdvance Tax Payment Percentage
On or before 15th June	15% of advance tax
On or before 15th September	45% of advance tax (-) advance tax already paid
On or before 15th December	75% of advance tax (-) advance tax already paid
On or before 15th March	100% of advance tax (-) advance tax already paid

For taxpayers who have opted for Presumptive Taxation Scheme under sections 44AD & 44ADA – Business Income

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

Pay Advance Tax Online?

1. Visit the e-filing portal of the Income Tax Department of India

2. On the left side of the home page, there is a ‘Quick Links’ section, click on the ‘e-Pay Tax‘ option. You can also search for ‘e-Pay Tax’ in the search bar.

3. On this page, enter your PAN and re-enter to confirm it. Then, enter your mobile number and click on ‘Continue’.

4. Now enter the 6-digit OTP received on your mobile number and ‘Continue’.

5. Select the first box labelled as ‘Income Tax’ and click on ‘Proceed’

6. Select the ‘Assessment Year’ as 2025-26 and ‘Type of Payment’ as ‘Advance Tax (100)’ and click on ‘Continue’.

7. Select the payment method and the bank and press ‘Continue’.

8. After completing the payment, you will get an acknowledgement on the next screen. You can see the BSR code and challan serial number on the right side of the challan. Save a copy of this tax receipt for future reference. You will need to enter the BSR code and challan number in your tax return.

Interest on advance tax:  
1. Non-payment of advance tax will attract interest under 234B: As per Section 234B, you must pay at least 90% of the total taxes as advance tax or TDS/TCS by 31st March. Failure to make advance tax payments will result in an interest @ 1% on the unpaid amount.

2. Delay in payment of advance tax will attract interest under 234C:

Particulars	Rate of Interest	Period of Interest	Amount on which interest is calculated
If Advance Tax paid by 15th June is less than 15%	1% per month	3 months	15% of Amount* (-) tax paid before June 15
If Advance Tax paid by 15th September is less than 45%	1% per month	3 months	45% of Amount* (-) tax paid before September 15
If Advance Tax paid by 15th December is less than 75%	1% per month	3 months	75% of Amount* (-) tax paid before December 15
If Advance Tax paid by 15th March is less than 100%	1% per month	1 month	100% of Amount* (-) tax paid before March 15

Example for Advance Tax Calculation

Let’s understand the calculation with the help of an example. Ajay is a freelancer earning income from the profession of interior decoration. For the FY 2024-25, Ajay estimates his annual gross receipts at Rs 20,00,000. Ajay estimates his expenses at Rs 12,00,000. Ajay has deposited Rs 40,000 in PPF account. Ajay has also paid Rs 25,000 towards the LIC premium. Further, Ajay has paid Rs 12,000 towards the medical insurance premiums. Professional receipts of Ajay are subject to TDS. Ajay estimates a TDS of Rs 30,000 on certain professional receipts for the FY 2024-25. Besides professional receipts, Ajay estimates an interest of Rs 10,000 on fixed deposits held by him. Ajay’s advance tax liability would be as below:

INCOME ESTIMATION FOR ADVANCE TAX	AMOUNT (Rs)	AMOUNT (Rs)
Income from profession:
Gross receipts	20,00,000
Less: Expenses	12,00,000	8,00,000
Income from other sources:
Interest from fixed deposit		10,000
GROSS TOTAL INCOME		8,10,000
Less: Deduction under section 80C
Contribution to PPF	40,000
LIC premium	25,000
	65,000
Deduction under section 80D	12,000	77,000
TOTAL INCOME		7,33,000
TAX PAYABLE		59,100
Add: Education cess @ 4%		2,364
		61,464
Less: TDS		30,000
TAX PAYABLE IN ADVANCE(as it exceeds Rs.10,000)		31,464

ADVANCE TAX PAYMENTS
Due date	Advance tax payable	Amount (Rs)
15th June	15% of Advance tax	4,700
15th September	45% of Advance tax	9,400 (14,100-4700)
15th December	75% of Advance tax	9,400 (23500-14100)
15th March	100% of Advance tax	7900 (31,400-23500)

Note: 

1. The above example of tax liability is calculated under the old tax regime since deductions under section 80C are beneficial to the assessee & the said section is available only in the case of the old tax regime. 

2. In the above case, the assessee is not liable to pay any advance if the net tax liability is not more than Rs.10,000, after adjusting with the TDS/TCS.

Tax payable/Tax Refundable

Advance tax is the payment of tax during the financial year in 4 instalments based on the estimated income for the year to avoid lump sum tax payment at the year end. If there is a shortage/excess of tax payment after adjusting advance tax, tax deducted at source & tax collected at source, the assessee would arrive at the tax payable or tax refundable, respectively.