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Advance Tax Due Dates AY 2023-24: Applicability, How to Pay Advance Tax

Advance Tax Due Dates AY 2023-24. Advance tax, a term often heard but not always understood. In this comprehensive guide, we delve into the intricacies of advance tax, demystifying its concepts and providing a step-by-step understanding of its calculation and payment.

What is Advance Tax?

Advance tax is not just a financial obligation; it’s a strategic financial planning tool. It refers to the income tax paid in advance, breaking away from the traditional lump sum payment at the year-end. Essentially, it’s the tax you pay as you earn, a crucial aspect for all income earners.

In the intricate realm of taxation, one term that often perplexes individuals, be they salaried employees, freelancers, or business owners, is “Advance Tax.” This financial obligation, rooted in the complexities of the income tax system, demands a closer look to understand who exactly should be shouldering this responsibility.

Also Read-Understanding Presumptive Taxation Schemes U/S Section 44ADA for Salaried Employees

Who Should be Paying Advance Tax?

1. Salaried Individuals.

For individuals drawing a regular salary, the threshold for advance tax kicks in when their total tax liability surpasses Rs 10,000 in a given financial year. This implies that if you fall into the salaried category, and your tax dues exceed this mark, it’s time to consider advance tax payments.

2. Freelancers.

Much like their salaried counterparts, freelancers find themselves subject to advance tax obligations when their total tax liability amounts to Rs 10,000 or more in a financial year. The freelancer’s journey, often marked by irregular income streams, requires vigilant attention to these taxation nuances.

3. Business Entities.

Businesses, regardless of their scale and structure, join the ranks of those obliged to pay advance tax when their cumulative tax liability hits the Rs 10,000 milestone. This applies universally, encompassing businesses of all sizes and legal configurations.

Exemptions for Senior Citizens.

While the obligation to pay advance tax is a common thread for many, exemptions do exist. Senior citizens, aged 60 years or more, find solace in being exempt from this financial duty, provided they are not engaged in any business activities. For seniors enjoying their retirement years, advance tax becomes a concern only if business income is part of the equation.

Must Read-Advance Tax Due Dates For AY 2024 25(FY 2023-24)| How to Calculate Advance Tax

The Presumptive Income Landscape.

1. Businesses under Section 44AD.

For businesses operating under the presumptive taxation scheme outlined in Section 44AD, the advance tax scenario takes a distinctive turn. These entities are mandated to remit the entire amount of their advance tax in a single installment on or before the 15th of March. Alternatively, they can fulfill their tax obligations in entirety by the 31st of March.

2. Professionals under Section 44ADA.

Independent professionals, ranging from doctors to lawyers and architects, find themselves under the ambit of the presumptive scheme dictated by Section 44ADA. In alignment with this framework, professionals must settle their entire advance tax liability in a single installment on or before the 15th of March. Alternatively, they can opt for the 31st of March as the deadline for clearing their tax dues.

Advance Tax Due Dates for FY 2023-24.

For a seamless process, understanding the due dates is crucial. Whether an individual or a corporate taxpayer, mark these dates to stay compliant.

Due DateAdvance Tax Payment Percentage
On or before 15th June15% of advance tax
On or before 15th Sept45% of advance tax (-) advance tax already paid
On or before 15th Dec75% of advance tax (-) advance tax already paid
On or before 15th March100% of advance tax (-) advance tax already paid

For taxpayers under the Presumptive Taxation Scheme (sections 44AD & 44ADA – Business Income):

Due DateAdvance Tax Payment Percentage
On or before 15th March100% of advance tax

How to Pay Advance Tax Online?

Embrace the digital era and pay your advance tax online hassle-free. Follow these simple steps:

  1. Visit the e-filing portal of the Income Tax Department of India.
  2. In the ‘Quick Links’ section, click on ‘e-Pay Tax’ or search for ‘e-Pay Tax’ in the search bar.
  3. Enter your PAN, confirm it, and input your mobile number. Continue by entering the OTP received on your mobile.
  4. Select ‘Income Tax’ and proceed. Choose the Assessment Year and Type of Payment as ‘Advance Tax (100)’.
  5. Enter all tax details, select payment method and bank, then continue.
  6. Preview the challan details, make any necessary edits, and click ‘Pay Now’.
  7. After payment, save the tax receipt, noting the BSR code and challan serial number for future tax return entries.

What is Advance Tax Late Payment Interest?

Understanding the consequences of late payment is vital:

  1. Interest under 234B: Failure to pay 90% of total taxes as advance tax by 31st March incurs 1% interest on the unpaid amount.
  2. Interest under 234C: Delayed payments incur monthly interest based on specific criteria.

Example for Advance Tax Calculation – Meet Ajay, the Freelancer

Ajay, a freelancer in interior decoration, estimates his FY 2023-24 income as follows:

  • Gross receipts: Rs 20,00,000
  • Expenses: Rs 12,00,000
  • PPF contribution: Rs 40,000
  • LIC premium: Rs 25,000
  • Medical insurance premiums: Rs 12,000
  • TDS: Rs 30,000 (on professional receipts)
  • Interest on fixed deposits: Rs 10,000

Ajay’s advance tax liability breakdown:

  • Total Income: Rs 7,33,000
  • Tax Payable: Rs 61,464
  • TDS: Rs 30,000
  • Advance Tax Payable:
    • 15th June: Rs 4,700
    • 15th September: Rs 14,100
    • 15th December: Rs 23,600
    • 15th March: Rs 31,400

FAQs on Advance Tax Payment

When should I pay advance tax?

Pay advance tax if your annual tax liability, after reducing TDS, exceeds Rs 10,000.

How can I rectify a mistake in advance tax payment?

Use the online challan correction feature within 7 days for assessment year changes and 30 days for major/minor head changes.

Is an NRI liable for payment of advance tax?

Yes, an NRI with income in India exceeding Rs 10,000 is liable for advance tax.

Can a senior citizen with pension and interest income skip advance tax?

Resident senior citizens without business or profession income are exempt.

What happens if I miss the deadline for the fourth installment on 15th March?

Payment can still be made by 31st March, considered as advance tax.

Why Should Advance Tax Payments Be Made?

Advance tax payments benefit both the government and taxpayers. For the government, it ensures a steady income flow, while for individuals and organizations, it alleviates the year-end tax burden. Non-payment may lead to interest liabilities under Income Tax law.

How to Check Advance Tax Payment Status?

To check status, visit NSDL, select CIN Based View, and enter required details. Alternatively, check Form 26AS on Income Tax India E-filing.

How to Write a Cheque for Advance Tax Payment?

For offline payments, download the challan. Use separate challans, quote PAN mandatorily, and ensure the bank’s acknowledgment includes BSR code, deposit date, and challan serial number.

How to Download the Advance Income Tax Challan?

View the challan at NSDL using CIN Based View. Enter details, click ‘View,’ and save or print the displayed details. Alternatively, download from the bank’s website.

How to Pay Advance Tax Online on ClearTax?

Use ClearTax’s advance tax calculator for calculations and click ‘Pay on Government Website.’ Follow the steps mentioned in their video.

Can I Pay Advance Tax After the Due Date?

No, advance tax must be paid in four installments: 15th June, 15th September, 15th December, and 15th March. Delayed payments incur interest under sections 234B and 234C.

Is It Possible to Revise Advance Tax?

No, revision is not allowed. However, corrections can be made in subsequent installments. Penalties may apply for under-reporting income.

Conclusion

Advance tax is a crucial component of responsible financial planning, ensuring smooth tax compliance and preventing unnecessary penalties. This comprehensive guide equips you with the knowledge needed to navigate the intricacies of advance tax, empowering you to meet your obligations seamlessly.


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Hello, I am C.K. Gupta Founder of Taxgst.in, a seasoned finance professional with a Master of Commerce degree and over 20 years of experience in accounting and finance. My extensive career has been dedicated to mastering the intricacies of financial management, tax consultancy, and strategic planning. Throughout my professional journey, I have honed my skills in financial analysis, tax planning, and compliance, ensuring that all practices adhere to the latest financial regulations. My expertise also extends to auditing, where I focus on maintaining accuracy and integrity in financial reporting. I am passionate about using my knowledge to provide insightful and reliable financial advice, helping businesses optimize their financial strategies and achieve their economic goals. At Taxgst.in, I aim to share valuable insights that assist our readers in navigating the complex world of taxes and finance with ease.

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