Advance tax allows taxpayers to spread out their income tax payments throughout the year.
Today, March 15, 2024, marks the final deadline for taxpayers in India to settle their fourth and final installment of advance tax for the financial year 2023-24. Missing this deadline can result in penalties and interest charges.
Advance tax allows taxpayers to spread out their income tax payments throughout the year, rather than paying a large sum at the end of the financial year. This system ensures a steady flow of tax revenue for the government.
Who Needs to Pay Advance Tax?
Salaried individuals, freelancers, and businesses: If your total tax liability is expected to be more than Rs 10,000 for the financial year, you are required to pay advance tax.
Senior citizens: Those aged 60 and above who do not have business income are exempt. However, senior citizens with business income must pay an advance tax.
Presumptive income taxpayers: Businesses and professionals under the presumptive taxation scheme (sections 44AD and 44ADA) have the option to pay their entire advance tax in one go by March 15th or by March 31st.
How To Pay Advance Income Tax?
Eligible taxpayers are required to make advance income tax payments in four installments throughout the financial year, typically in June, September, December, and March. These payments can be made conveniently online via either the official website of the Income Tax Department (incometaxindia.gov.in) or the National Securities Depository.
Act Now To Avoid Penalties
The Income Tax Department urges all taxpayers to settle their advance tax dues before the deadline.
Failure to do so can lead to interest charges under sections 234B and 234C of the Income Tax Act.
For more information on advance tax and how to calculate your liability, taxpayers can visit the Income Tax Department’s website.