Advance Tax is pre-paid tax by the assessee on the income earned during the year. In simple words, you can say that assessee has to pay taxes in advance on the estimated income during the year in instalment for the individual assessee, companies and corporate assessees.
For example, for the financial year 2021-22 (relevant to the assessment year 2022-23), advance tax is payable in instalments during 2021-22.
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?
- Senior Citizens whose age is 60 years or older not running any business exempt to pay advance tax.
Advance Tax Due Dates for (A.Y.2022-23 F.Y. 2021-22)
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 dates are applicable to all assessments. Check Interest on Short or Non Payment of Advance Tax
|Advance Tax||Installment||Due Dates|
|15% of Advance Tax||1st Installment||15th June|
|45% of Advance Tax||2nd Installment||15th September|
|75% of Advance Tax||3rd Installment||15th December|
|100% of Advance Tax||4th Installment||15th March|
|The taxpayers who have opted for presumptive taxation scheme under section 44AD & 44ADA Business income can pay 100% of advance tax on or before 15th March.|
Advance Tax Payment Due Dates Important Points
- 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.
How to Calculate Advance Tax?
- Advance tax is payable in instalment 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 – Latest Amendments
Senior citizens (Over 60 Years) need not to pay advance tax if not having any business income. (w.e.f.1-4-2012).
Hope you will like our article on advance tax payment/instalment due dates. If you have any queries related to the last dates of advance tax payment then comment, we will try to answer in the next 24 hours.