Advance Tax Payment Due Dates (A.Y.2024-25) (F.Y.2023-24)

Advance Tax Payment Due Dates FY 2023-24: It is a pre-paid tax paid by the taxpayer on the income earned during the year. In simple terms, this means that you should pay taxes in advance on your estimated annual earnings in instalments. This applies to individual, company as well as corporate assesses.

For example, during Financial Year 2023-24 (relevant to Assessment Year 2024-25), the assessee must pay advance tax in instalments throughout the year 2023-24.

In this post let us talk about the due dates for making such advanced payments for assessment year 2024-25.

Who is Liable to Pay Advance Tax?

The following persons are required to pay advance tax before the last date.

• Salaried Persons whose tax is calculated at more than Rs.10,000 are liable to pay advance tax.
• Businessmen whose tax is calculated as more than Rs.10,000 are liable to pay advance tax.
• Freelancers whose tax is calculated as more than Rs.10,000 are liable to pay advance tax.

Who is not Liable to Pay Advance Tax?

People who are 60 or above and do not have any business running are exempt from paying advance tax. You don’t need to pay advance tax if you meet all these conditions.

• Individuals
• Reside in India as per the provisions of the Income Tax Act.
• Complete 60 years of age in any month or year (or more).
• Do not earn any profit out of your profession or business;

This provision has been introduced keeping in mind elderly citizens falling under this category as a preventive measure against financial burden.

Advance Tax Payment Due Dates for (A.Y.2024-25 F.Y. 2023-24)

The advance tax has to be paid by the assessee on the following dates specified by the Income Tax act. The delay in the payment of advance tax attracts a penalty. The following table contains advance tax payment due dates for f.y. 2023-24.  Check Interest on Short or Non Payment of Advance Tax

Advance Tax	Installment	Due Dates
15% of Advance Tax	1st Installment	15th June 2023
45% of Advance Tax	2nd Installment	15th September 2023
75% of Advance Tax	3rd Installment	15th December 2023
100% of Advance Tax	4th Installment	15th March 2023
The taxpayers who have opted for the presumptive taxation scheme under sections 44AD & 44ADA Business income can pay 100% of advance tax on or before 15th March.

Mr. Patel’s Situation and Advance Tax Liability (Example)

Mr. Patel’s Problem:

– Mr. Patel is the owner of a provision store.

– During the year 2023-24, his shop has earned an amount of Rupees One crore fifty lakh only.

– He wants to declare his income for tax purposes under section 44AD which gives that he can declare income as 8% of turnover.

Advance Tax Liability:

– As per section 44AD, he can calculate his income as 8% of turnover for his provision store business.

– However, even if he chooses this section, he is still liable to pay advance tax.

To put it simply, Mr Patel can use section 44AD to calculate his income based on percentage of turnover from the store but should also pay advance tax on it generated by such business. This means that he should pay taxes in advance throughout the year using the simplified calculation method given by section 44AD.

Mr. Rajesh’s Tax Situation and Advance Tax Liability

Mr. Rajesh’s Situation:

– A man named Mr. Rajesh is 39 years old and owns a medical shop.

– In the FY 2023-24, his store had a turnover of Rs. 35,00,000.

– As per his accounts, he has earned a net profit of Rs. 2,30,000.

Advance Tax Liability:

– The requirement to pay advance tax by Mr Rajesh depends on his estimated tax liability for the financial year

– His taxable income is Rs. 2,30,000.

– He falls under the tax bracket of 5% as per normal rates applicable to individuals below 60 years of age.

– However, there is a rebate under section 87A if total income is below a certain threshold

– Since his income is less than INR 500000 he gets a rebate under section 87A.

– Therefore no tax becomes payable i.e zero tax liability and hence no need to pay any advance tax

Advance Tax Payment Due Dates Important Points

You should consider the following points about advance tax payment dues for f.y. 2023-24.

• Business/Professional assessees declaring income under the estimated income scheme u/s44AD or 44ADA shall be required to deposit the whole of advance tax by 15th March of the financial year.
• Any amount deposited by 31st March is treated as advance tax for that financial year.
  
• In the case of salary income, the tax is deducted by the employer. So TDS is also treated as prepaid taxes. So salaried person pay advance tax but in the shape of TDS. So the Salaried person needs to pay tax if the tax is less than TDS.  But if the TDS is less than the actual Tax then they are also liable to pay advance tax.

But TDS should be deposited latest by 31st March of the financial year.

If the due date is Sunday or any holiday then the assessee can deposit the advance tax on the next working day. It will be treated as advance tax and no penal interest will be charged.

Check our article: Who is required to pay advance tax?

The payment of advance tax dates is very important. The penal interest at the end of the financial year will be calculated by the delay from the due date of a particular instalment. So don’t miss the advance tax payment date. To do this bookmark this page and visit regularly or subscribe to your email to get a monthly reminder of all the due dates/closing dates of Income Tax and other taxes in India.

Know more about how to deposit advance tax?

How to Calculate Advance Tax?

• Advance tax is payable in instalments as above on total income estimated for the financial year including capital gains and casual incomes such as winning from lotteries, races etc.
• The income for the current year should be estimated as precisely and correctly as possible. The mistake attracts penal interest.
• If any capital gains or casual income arises subsequent to payment of an instalment, the remaining instalment of advance tax should be revised. If any income arises after 15th March then advance tax can be deposited on such income up to 31st March.

Advance Tax Payment Options

Modes of Payment: Broadly, there are two ways in which the taxpayer can pay advance tax:

• On his own account: The taxpayer may estimate his current income and make payment of advance tax voluntarily without any direction from the Assessing Officer.
• By way of an order: Alternatively, the taxpayer may be required to pay advance tax as per the directive issued by Assessing Officer.

2. Estimation of Current Income: Taxpayers (liable to pay advance tax) have to estimate their current income and pay taxes on such estimation.

3. Revision of Advance Tax: Wherever there is a change in the liability after payment of first/second/third instalment of advance tax, remaining instalments can be adjusted on revised estimates of income so that the correct amount as per re-assessment is paid by them.

4. Computation of Tax: The basis for computation is estimated current income which attracts slab rates for the financial year applicable thereto and this estimated figure undergoes modifications.

5. Deductions: There are various deductions made from computed tax. Tax deducted or collected at source shall be deducted from calculated tax Any relief of tax allowed under section 90 or section 90A, deductions under section 91 or set off as per section 115JAA or section 115JD is also subtracted from total amount payable

6. Remaining Tax Payable: After all these adjustments, balance amount becomes advance tax liability i.e., what should be paid by assessee in installments

In nutshell , it can be said that through this system people assess their present earnings , calculate different credits applicable & finally remit balance fee due periodically throughout a year so that they never miss paying revenue regularly on time .

Know more about how to calculate Advance Tax

Advance Tax Payment – Latest Amendments

1. Advance Tax Requirement (Section 208): If your estimated tax bill for the year is Rs. 10,000 or more, you must pay your taxes in advance, which is known as “advance tax.” This means you can’t wait until the end of the year to pay all your taxes; you need to pay some of it in advance by certain due dates.
2. Exception for Senior Citizens (Section 207): However, there’s an exception for senior citizens who are 60 years old or above and don’t have income from a business or profession. They are not required to pay advance tax.