Advance Tax Deadline: Taxpayers have only five days left to pay the second installment of advance tax for the financial year 2024-2025. The last date for paying advance tax is 15 September 2024.
If you do not pay the advance tax by this date, you will have to pay a penalty under sections 234B and 234C.
Advance tax has to be paid 4 times a year
Advance tax is paid in the same financial year in which the income is earned. It has to be paid four times in a financial year. That is, it has to be paid in four installments. Taxpayers have to pay 15% of the total tax liability by June 15. While 45% has to be paid by September 15. This also includes the tax paid till June 15. The liability till December 15 is 75% which includes the installments of June and September. According to the Income Tax Act, 100% of the entire tax has to be paid by March 15.
Advance tax: Payment in four installments
Advance tax is to be paid in four instalments in the same financial year in which the income is earned :
15% – till 15 June
45% – By September 15 (includes 1st instalment)
75% – By 15th December (includes 1st and 2nd instalment)
100% – by 15 March
Who has to pay advance tax?
If you still have a tax liability of Rs 10,000 or more after deducting TDS on your income, then you will have to pay advance tax. Apart from salary, this also includes income from rent, capital gains, FD interest, or lottery winnings.
What will happen if advance tax is not paid?
If you do not pay advance tax or pay it late, you will have to pay a penalty as per section 234B and 234C under the Income Tax Department. The rate of this penalty is 1% per month.
Section 234B: If you have not paid 90% of the total tax by March 31, then you will have to pay interest at the rate of 1% per month.
Section 234C: Interest will be charged at the rate of 1% per month for four installments at different times. Hence, it is very important to pay the advance tax properly and on time to avoid additional penalty.
