Have You Missed Paying Advance Tax?

Written by Gagandeep Arora - Printed on - Date - 2nd Dec 2022

Advance tax as the name suggests it is the tax paid much before the financial year ends. Famously, known as ‘ Pay as you earn’ tax also. In other words, an amount is paid to the Income Tax department according to the due dates given by them in the same year the income is received. By paying the taxes you not only act as a good citizen, but the new tax brackets are consumer-friendly so that it does not pinch your pocket and are easy to pay at your convenience.

What is Advance Tax And Who Needs To Pay?

As the name suggests it is the tax paid much before the financial year ends. Famously, known as ‘ Pay as you earn’ tax also. In other words, an amount is paid to the Income Tax department according to the due dates given by them in the same year the income is received. The specific section of people who are covered in this category is-

Firstly, as per section 208 of the Income Tax Act if an individual who has a tax liability of 10,000 or more in a financial year is liable to pay advance tax in the same year.

Secondly, this tax is applicable for people who have an income from sources other than salary.

Thirdly, self-employed Individuals, professionals, and businessmen who exceed the limit set by the government are also liable to pay advance tax.

Fourthly, any income earned by shares, interest earned on fixed deposits, rent or income received from tenants is included in the above calculations.

Fifthly, Senior citizens more than 60 years of age are exempt from this tax.

Calculation of Advance Tax

1). Sum up the total income earned from all the other sources besides the salary earned.
2). Deduct the expenses from that amount such as medical insurance, premiums, phone costs, travel expenses and further on.
3). To this amount add other income that you earned like interest from FDs, house rent, and lottery winnings.
4). If the amount calculated is more than 10,000, then you are liable to pay Advance Tax.

Payment Due Date for Financial Year 2022-23

The last date of payment of advance tax is 15th March 2023. To avoid any error in the payment of advance tax and to not miss the dates as mentioned by the Income-tax department we can refer to the table given below-

Installment Date	Amount Payable
On or before June 15th	Not less than 15% of the advance tax liability
On or before September 15 th	Not less than 45% of the advance tax liability
On or before December 15th	Not less than 75% of the advance tax liability
On or before March 15th	100% of tax liability

Forget Me Nots

1). In case, an individual misses the deadline for the payment of the Advance Tax then, you can pay the tax after the due date but it will not be considered as advance tax.
2). In case of non-payment of Advance Tax is covered under Section 234B and 234C which makes you liable to pay interest.
3). Any amount deposited by 31st March is treated as advance tax liability of that financial year.