Advance tax: If your tax liability is Rs 10,000 or more, it is mandatory to fill the final installment of advance tax by 15 March 2025. This is an important tax la weality under the Income Tax Act, which gives the government tax in the same financial year which has income.
Who pays advance tax?
All salary employees, whose income, in addition to salary, the rent, capital gains come from profit or interest income.
People associated with business and self-employment also have to pay advance tax.
Senior citizens above 60 years of age, who do not have income from business or profession, are exempted from advance tax.
Salared employees whose total tax liability is deducted from TDS (tax deducted at source) does not need to pay advance tax.
When do you have to pay advance tax?
June 15 – 15% of total tax liability
September 15 – 45% of total tax liability (including first installment)
December 15 – 75% of total tax liability (including first and second installment)
March 15 – 100% of total tax liability
How to pay?
E-payment is mandatory for corporate taxpayers and taxpayers whose account is required for audit under section 44ab.
Other taxpayers can also make online payment, which will save time and the process will be easier.
Penalty for not paying advance tax
If any taxpayers do not pay advance tax on time, then interest will have to be paid under Section 234B and 234C of the Income Tax Act.
Under 234C, if there is no tax on time on time, the outstanding amount will cost 1% monthly interest.
Under 234B, if 90% of the total tax is not deposited by March 15, then the outstanding amount will be charged at a rate of 1% monthly, until the entire tax is repaid.
What to do?
If you have not yet paid advance tax, make your payment before the March 15 deadline so that interest and penalty can be avoided.
PPF, SSY, ELSS, NPS can invite invested till 31 March for tax-saving