Advance tax deadline on September 15: Who needs to pay?
The deadline for the second installment of advance tax for FY 2024-25 is fast approaching, with the due date set for September 15. It's crucial that taxpayers who meet the criteria for advance tax make their payments promptly to avoid penalties. The requirement to pay advance tax applies to any individual or business whose total tax liability exceeds ₹10,000 after considering TDS (Tax Deducted at Source).
Who is required to pay advance tax?
The obligation to pay advance tax extends to a wide range of taxpayers, including salaried employees, freelancers, and businesses. However, there are exceptions such as senior citizens above 60 years who do not have business income. These individuals are exempt from this requirement. The payment of advance tax is typically spread over four installments throughout the fiscal year.
How to pay advance tax
Taxpayers have the option to pay their advance tax online via the official Income Tax Department website or through authorized banks. The process involves logging into the Income Tax India e-filing portal, selecting "Advance Tax" under the "e-Pay Tax" option, and entering relevant details like PAN and assessment year. Payments can be done using net banking, debit card, or UPI. Alternatively, offline payments can also be made at designated bank branches by filling out Challan 280.
Penalties for non-payment of advance tax
The Income Tax Act imposes penalties for failing to pay advance tax on time under Sections 234B and 234C. If 90% of the total tax liability is not paid by the end of the fiscal year, taxpayers are charged an interest of 1% per month under Section 234B. Similarly, a penalty of 1% per month applies if advance tax installments are not paid on time as per Section 234C.
