Advance Tax: The Significance of the December 15 Deadline

If you have to pay advance tax, December 15 is an important day. The second advance tax instalment for the third quarter of the fiscal year 2024 must be deposited by December 15. If you fail to pay advance tax, you will be penalised. You will also have to pay interest for the delay. Understand what advance tax is and when you must pay it each year.

What Is Advance Tax?

An advance tax payment is made throughout the fiscal year rather than at the end. It is paid in instalments according to tax legislation.

Who Is Required To Pay Advance Tax?

Individuals having expected tax obligations of Rs 10,000 or more, after accounting for tax deducted at source (TDS) from the previous year, are obliged to pay advance tax under Section 208 of the Income Tax Act, 1961. This applies to employees, freelancers, company owners, and anyone who earns money differently. On the other hand, those above the age of 60 who do not conduct any business are immune from advance tax.

When Is Advance Tax Paid?

Advance tax, unlike a regular tax, must be paid in instalments rather than in one single payment once a year. It must be paid every three months. The Income Tax Department determines the date. These dates are June 15, September 15, December 15, and March 15 for Fiscal Years 2022-23 and 2023-24.

How Much Advance Tax Must You Pay?

Even if it is paid in instalments, advance tax is computed for the full year. You must assess how much tax you may have to pay in a year in advance. After deducting your revenue, you may compute tax on the remaining income based on your tax bracket.

Penalties For Failing To Make An Advance Tax Payment

Penal interest, defined by Sections 234B and 234C, relates to advance tax payment failures. Under both clauses, interest of 1% per month or a portion thereof is charged. Section 234B deals with late or missed advance tax payments, whereas Section 234C deals with non-payment or underpayment of specific advance tax instalments.

You must pay at least 15% of your advance tax by June 15. Whereas 45% of advance tax must be paid by September 15, 75% of advance tax must be paid by December 15, and 100% of advance tax must be paid by March 15.

Check Advance Tax Due Dates

  • 15% of the advance tax must be paid on or before June 15th.
  • On or before September 15th, 45% of the advance tax (minus tax already paid) must be paid.
  • On or before December 15th, 75% of the advance tax (less taxes previously paid) is payable.
  • On or before March 15, the whole advance tax (less tax previously paid) is payable.

How to Make an Advance Tax Payment

  • Visit the Income Tax website by clicking here.
  • Click on “e-Pay tax,” input your PAN and cellphone number, and then enter the OTP you got.
  • Choose “advance tax” from the drop-down box after selecting the assessment year.
  • Continue after entering the tax amount. Proceed after selecting a payment method.
  • Click “Pay Now” to finish the transaction.

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