💰 Pay as you Earn
Advance Tax
The scheme of advance tax requires every Assessee to estimate his current income and if tax liability on such estimated income exceeds the specified limit, the Assessee is required to pay the estimated tax in instalments during the financial year itself.
| Liable to pay Advance Tax | Not liable to pay Advance Tax |
|---|---|
| Every person whose estimated tax liability for the Financial Year is ₹10,000 or more shall pay his taxes in advance in the form of “advance tax”. | A resident senior citizen (i.e., individual aged 60 or above) not having any income from business or profession. |
Advance Tax Payment Schedule (Corporate & Non-Corporate)
[Other than Assessee computing profits under presumptive basis u/s 44AD or 44ADA]
| Instalment | Due Date | Amount Payable |
|---|---|---|
| First | On or before 15th June | 15% of total advance tax |
| Second | On or before 15th September | 45% of total advance tax (less tax paid earlier) |
| Third | On or before 15th December | 75% of total advance tax (less tax paid earlier) |
| Fourth | On or before 15th March | 100% of advance tax (less tax paid earlier) |
Presumptive Income (u/s 44AD & 44ADA)
Assessees opting for presumptive taxation must pay their entire advance tax (100%) on or before 15th March of the previous year.
Note:
- Any tax paid on or before 31st March shall also be treated as advance tax.
- If advance tax is not paid, interest liability will arise:
- Section 234B: 1% p.m. for default in payment
- Section 234C: 1% p.m. for deferment in payment
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