Advance tax refers to the income tax that is required to be paid in advance throughout the year, in installments according to the designated due dates by the income tax department.
It is commonly referred to as the ‘pay as you earn’ tax, and is expected to be settled in the same year in which the income is earned.
To be compliant with tax regulations, individuals and businesses with a tax liability of Rs 10,000 or more in a financial year are required to pay advance tax.
This includes salaried individuals, freelancers, and businesses. Advance tax must be paid in four installments before the financial year ends on June 15, September 15, December 15, and March 15.
Advance Tax Payment Schedule for FY 2024-25
In accordance with the advance tax regulations for the financial year 2024-25, the due dates for advance tax payments are as follows:
- On or before 15th June, 2024: 15% of the advance tax liability
- By 15 September 2024: 45% of the advance tax liability (less the amount already paid)
- By 15 December 2024: 75% of the advance tax liability (less the amount already paid)
- By 15 March 2025: 100% of the advance tax liability (less the amount already paid)
Next Deadline
The upcoming deadline to pay advance tax is on December 15, 2024. Since December 15 falls on a Sunday, taxpayers are advised to make the payment on December 16, which is the following working day.
According to the Income Tax circular, if the due date for advance tax payment falls on a public holiday, the next business day will be considered the deadline for payment.
“In cases where the last date for making payment of such instalments (i.e., 15th September, 15th December and 15th March) happens to be a holiday and the assessee pays the due amount of advance tax on the next working day….It is hereby clarified that if the last day for payment of any instalments of advance tax is a day on which the receiving bank is closed, the assessee can make the payment on the next immediately following working day, and in such cases, the mandatory interest leviable under sections 234B and 234C of the Income-tax Act, 1961 would not be charged,” the I-T Department had stated in a circular in 1994.
According to CA (Dr.) Suresh Surana, it is permissible to deposit the advance tax for the third installment of FY 2024-25 on December 16, 2024 without incurring any penalties or interest. This is in accordance with the Circular of January 1994, as December 15, 2024, falls on a Sunday.
To pay advance tax online, follow these steps:
- Go to the e-filing portal of the Income Tax Department of India.
- Click on ‘e-Pay Tax’ in the ‘Quick Links’ section.
- Enter your PAN and verify it, along with providing your mobile number.
- Input the OTP received on your mobile device.
- Select the appropriate tax category under ‘Income Tax’ and proceed.
- Choose the payment type as ‘100’ for ‘Advance Tax for 100’.
- Enter the tax amounts and select your preferred payment method.
- Review the details of the challan and click on ‘Pay Now’.
- Make sure to keep the tax receipt safe for future reference.
MyProfitArea previously reported that the India’s Income Tax Department, together with the CBDT, has advised all taxpayers who reside in India to file their Income Tax Return (ITR) for the AY 2024-25.
More so, the upcoming Budget that will be presented by Finance Minister Nirmala Sitharaman in February 2025 is likely to provide income tax relief to the low-income group with tax reduction expected in the Rs 3 lakh – Rs 7 lakh tax slab under the new regime.
