Advance Tax Payment

Advance Tax Payment – Calculation & Due Dates

Are you liable to pay advance tax payment? This post shares when and why you need to pay advance tax. The advance tax is paid in 4 installments. The government provides due dates to pay the advance tax. The current schedule is fixed as 15%, 45%, 75% and 100% of income.

The due dates are 15th June, 15th September, 15thDecember, and 15th of March respectively. Until last year, tax payers had to pay it as 30%, 60% and 100% on the full year’s income. The due dates for last year were 15th of September, 15th of December and 15th of March. The alternation in due dates this year has notably increased the burden on tax payers. Check the due dates and procedure to pay advance tax payment. In Advance Tax Payment we have to pay the part of government taxes before the end of the financial year.

However, there is a meager relief for tax payers with the new budget. As per the new amendment, any individual paying 12% and 36% for June 15th and Sep. 15th, will not be liable to pay 1% shortfall interest. The major problem lies in calculating the advance income tax for the entire financial year. This post will help you with calculation of advance tax payment.

advance tax payment

What is Advance Tax Payment?

Advance tax payment is the payment of income tax which is paid in advance. Instead of paying in a lump sum at the end of the year, it is paid in advance. It is paid in four installments as per the prescribed due dates. The income tax department prescribes due dates for advance tax payment.

Who is Liable to Pay Advance Tax?

You are liable for advance tax if your total tax liability for the year is Rs. 10,000 or more than that. All tax payers including salaried people, businessmen, and freelancers. All senior citizens (above 60) who are not running any business are exempted from the payment of advance tax.

Due Dates for Payment of Advance Tax for 2016-2017

Starting 2016-2017, following are the due dates for advance tax payment:

Due Date Advance Tax Amount
On or before 15th June 15%
On or before 15th September 45%
On or before 15th December 75%
On or before 15th March 100%

FY 2014-15 and FY 2015-16

Due Date For corporate For individual
On or before 15th June 15% of advance tax
On or before 15th September 45% of advance tax 30% of advance tax
On or before 15th December 75% of advance tax 60% of advance tax
On or before 15th March 100% of advance tax 100% of advance tax

Do read on further to know the computation and late interest for advance tax payment.

Advance Tax Calculation | Advance Tax Calculator

The advance tax is to be paid on a particular date. It is paid in a percentage of the total estimated tax payable for the whole financial year. In order to calculate the advance tax, an individual tax payer has to take care of following:

  1. Accurate estimation of his expected income (for whole year)
  2. Calculate the income tax that would be payable on the estimated income for the year
  3. Pay the advance tax by the stipulated dates and percentage as prescribed by IT department.

To arrive at the most precise advance tax, we recommend you to use the advance tax calculator. The official site provides complete advance tax calculator. Just click the below link and calculate your advance tax for the year:

Just select the type of tax payer you are, gender and nationality from the drop down menus. Enter your income and fill up all the details in the boxes. After filling up all the details, click the ‘Calculate’ button at the bottom.

how to pay advance tax

Who are Exempted from Advance Tax?

Any individual who is a citizen and resident of India and above 60 years; does not have any income chargeable under profits and gains of business or profession is exempted from advance tax.

Presumptive Taxes

Section 44AA of the income tax act, 1961 orders businessmen to maintain books of account. Presumptive taxes give relief to small taxpayers from the tedious job of maintaining regular books of account. Presumptive taxation scheme is formed under section 44AD, 44ADA and 44AE. The scheme allows a taxpayer to declare income at a prescribed rate only. Hence, there is no need of maintaining books of account for small taxpayers. The presumptive scheme is now extended to occupations like doctors, architects, lawyers etc. (only if their income are Rs. 50 lakhs or less than Rs. 50 lakhs). For the year 2016-2017, all the businesses who are having turnover Rs. 2 crores or less can opt for presumptive taxation schemes.

If a person is eligible and goes for presumptive tax scheme, he is liable to pay presumptive taxes. In this case, the 4 due dates of advance tax payment are not applicable to him.

Interest on Advance Tax Payment

Following are the applicable interest on the advance tax payment:

  1. Section 234C – interest at @ 1% per month is applicable if the tax is not paid as per the prescribed installments or schedule

Under this section, interest is applicable in following conditions:

  • If the advance tax paid on or before 15th is less than 30% of the tax due on total income declared
  • Or if the advance tax deposited on or before 15th of December is less than 60% of the tax due
  • If advance income tax paid before or on 15th of March is less than tax due on declared income.
  • When tax payer has not paid the advance tax at all.
  1. Section 234B – interest at 1% is applicable if 90% of the tax is not paid before end of the year


How to Pay Advance Tax?

Follow the below link at the tin-nsdl tax information network:

Pay your advance tax online choosing the challan 280. Individuals and corporate can select the type of tax payer as applicable. Choose the financial year and proceed with online advance tax payment.

To file returns of your tax, do refer to our post on how to file income tax return. Our site carries all you need to know about income tax payments and TDS. Do leave your comments in case of any query pertaining to income tax refund status or TDS refund status. The information shared here will surely help you to be updated on latest advance tax payment procedures and due dates. Visit us to know online procedures of income tax payment and TDS payment. We cover everything related to income tax. For any queries related to advance tax payment use the comment section below to communicate with our experts.

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