What is Advance Tax
Advance Tax is a mechanism to collect tax in instalments by the government.
As per section 208, every person whose estimated tax liability for the year is Rs. 10,000 or more, shall pay his tax in advance, in the form of “advance tax”.
Person not liable to pay advance tax :
As discussed above, every person whose estimated tax liability for the year is Rs. 10,000 or more is liable to pay advance tax. However, a resident senior citizen (i.e., an individual of the age of 60 years or above during the relevant financial year) not having any income from business or profession is not liable to pay advance tax.
Illustration
Mr. A (age 39 years) is running a medical store. The turnover of the store for the financial year 2023-24 amounted to Rs. 40,00,000. His accounts revealed a net profit of Rs. 2,60,000. Will he be liable to pay advance tax?
In this case, Mr. A will be liable to pay advance tax in respect of income generated from medical store business if his estimated tax liability for the financial year comes out Rs. 10,000 or more. The taxable income of Mr. A is Rs. 2,60,000. Tax on Rs. 2,60,000 will be Rs. NIL, hence, Mr. A is not liable to pay advance tax.
Advance Tax Due Dates:
| Due Date | Advance Tax Payment Percentage |
| On or before 15th June | 15% of advance tax |
| On or before 15th September | 45% of advance tax less advance tax already paid |
| On or before 15th December | 75% of advance tax less advance tax already paid |
| On or before 15th March | 100% of advance tax less advance tax already paid |
Note 1: Any tax paid till 31st March will be treated as advance tax.
Note 2: If the last day for payment of any instalment of advance tax is a day on which the banks are closed, then the taxpayer should pay the advance tax on the immediately following working day [Circular No. 676, dated 14-1-1994].
Advance Tax Calculator:
Click below to calculate your Advance Tax:
https://incometaxindia.gov.in/pages/tools/advance-tax-calculator.aspx
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