What is Advance Tax ? How to Calculate & Pay Online ?

by | Feb 26, 2024 | TAX

What is Advance Tax?

Advance Tax is the Income Tax paid in advance for the income earned in a particular financial year. Usually, the tax is to be paid when the income is earned. Still, under the tax provisions of advance tax, the payer has to estimate the income for the entire year.

Who is required to Pay Advance Tax?

Every person whose estimated tax liability for the year is more than or equal to INR 10,000 is liable to pay Advance Tax. The Advance Tax applies to all taxpayers, salaried, freelancers, and businesses.

However, people aged 60 years or more, and 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.

What are the Due Dates of Advance Tax?

Due Dates

Advance Tax Payment %

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 are required to pay 100% advance tax on or before 15th March.

How to Pay Advance Tax Online | advalyze.in

How to Pay Advance Tax Online | advalyze.in

How to Pay Advance Tax Online?

1. Go to the official e-filing portal of the Indian Income Tax Department.
2. Look for the ‘Quick Links’ section on the left side of the home page and click on ‘e-Pay Tax’. Alternatively, you can use the search bar to find the ‘e-Pay Tax’ option.
3. Enter your PAN (Permanent Account Number) and confirm it by entering it again. Provide your mobile number and click ‘Continue’.
4. You will receive a 6-digit OTP (One-Time Password) on your mobile number. Enter this OTP and click ‘Continue’.
5. Select the ‘Income Tax’ option from the checkboxes and click ‘Proceed’.
6. Choose the Assessment Year as 2024-25 and the ‘Type of Payment’ as ‘Advance Tax (100)’. Click ‘Continue’.
7. Fill in all the required tax details.
8. Select your preferred payment method and bank, and click ‘Continue’.
9. Review the challan details and click ‘Pay Now’. If needed, you can edit the details before proceeding.
10.  After the payment is completed, you will receive an acknowledgement on the next screen. Save a copy of the tax receipt, which contains the BSR code and challan serial number, for future reference. These details will be required when filing your tax return.

What are The Consequences if it’s Not Paid or Short Paid?

  • Treated as default u/s 234B and u/s 234C
  • Simple interest @1% from 1st April of the Assessment year to the date of filing of the Return of Income u/s 234B
  • Simple interest @1% for 3 months in respect of each installment payable on 15th June, 15th Sep and 15th December and @1% on last installment i.e. on 15th March

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