Advance Tax Payment: A Comprehensive Guide – NewsRoomUS

Advance tax is tax payable by an Assessee if the entire computed tax for the 12 months is greater than Rs 10,000 & who’ve sources of earnings apart from their wage. That is relevant to lease, capital positive aspects from shares, mounted deposits, lottery winnings, and so on. It may be paid on-line or by way of sure banks.

The ‘Pay as you Earn’ plan is one other identify for advance tax. In case your tax legal responsibility exceeds ₹ 10,000 in a monetary 12 months, you should pay the advance tax. The 12 months wherein the earnings is the obtained in the identical 12 months the tax ought to be paid.

What’s Advance Tax Cost?

Advance tax might be described as earnings tax paid prematurely for the earnings earned in a specific monetary 12 months. Often, the tax is to be paid when the earnings is earned. As per the provisions of Earnings Tax Act associated to advance tax, the payer has to estimate the earnings for the whole 12 months. And primarily based on this estimate the tax is paid at particular time intervals

Tax cost challans can be utilized to pay advance tax at financial institution branches which were authorised by the Earnings Tax Division. It may be deposited in any of the authorised banks.

Another choice for making an advance tax cost is to make use of the Earnings Tax Division’s on-line tax cost web site or the Nationwide Securities Depository.

Who’s liable to pay Advance Tax?

As a way to be liable (eligible) to pay advance tax, the next standards have to be meet:

As per part 208 of the Earnings Tax Act 1961, each individual whose estimated tax legal responsibility for the 12 months is greater than or equal to `10,000 is liable to pay advance tax.

Those that are excluded from paying advance tax are Senior residents, whose age is 60 years or extra however don’t have any earnings by way of enterprise or occupation.

  • Your tax payable ought to be a minimum of ₹ 10,000 or above.
  • It is best to both be self-employed or salaried.
  • Earnings earned or obtained on by way of capital gains on shares
  • Fastened deposit curiosity earned.
  • A lottery winner’s winnings.
  • Earnings or lease earned from a home property

What’s the advance tax cost due date for FY 2022-23?

The ultimate instalment of advance tax cost for Monetary Yr (FY) 2022-23 is due on March 15, 2023. Taxpayers should pay their complete advance tax legal responsibility by or earlier than this due date.

Advance Tax for Taxpayers (aside from those who’re lined underneath part 44AD or 44 ADA):

Cost Due Date Quantity to be Paid as Advance Tax

On or earlier than 15 June

15% of the Advance Tax

On or earlier than 15 September

45% of the Advance Tax

On or earlier than 15 December

75% of the Advance Tax

On or earlier than 15 March

100% of the Advance Tax

Which varieties are required prematurely tax?

On or earlier than the deadlines, the shape Challan No. ITNS 280 have to be correctly filed. The Challan No. ITNS 280 has the next preconditions:

  • PAN Particulars – Be sure you share the right PAN particulars, or your tax will likely be positioned within the identify of another person.
  • Evaluation Yr – As a result of the tax is being paid prematurely for the next monetary 12 months, be sure to choose the proper evaluation 12 months.
  • Selecting a Cost Sort – Within the type, the taxpayer should select a cost sort as given under:
    • It’s advance tax if the tax is paid for a similar fiscal 12 months primarily based on the estimated earnings.
    • It’s self-assessment tax if the tax is paid after the tip of the monetary 12 months.

A Challan Identification Quantity (CIN) will likely be equipped after the cost has been obtained. You could preserve a report of this data and make the most of this CIN when filing your income tax return. Additionally, double-check whether or not the Earnings Tax Division has obtained the net cost which was made by way of TNS 280.

What’s advance tax challan 280?

On the web site of the Earnings Tax Division of India, Challan 280 allows customers to make on-line earnings tax funds. On the web site, one has to pick this challan and fill the shape after which use it to pay taxes on-line/offline. Obtain the Challan 280 type from the Earnings Tax Web site, fill it out, and take it to the financial institution if you wish to pay your taxes offline.

The right way to calculate advance tax? Defined with an Instance

You possibly can estimate your advance earnings tax liabilities by following the 4 easy steps:

  1. Estimate your earnings to be earned through the monetary 12 months

This consists of making an estimate of doable annual earnings one would possibly get. Curiosity earnings, rental earnings, capital positive aspects, skilled earnings, and another forms of incomes should all be mixed.

  1. Calculate the price related to the anticipated earnings.
  2. The deductions you propose to make underneath Chapter VIA ought to be calculated.
  3. Calculate the general tax payable.

Make certain to think about these factors when calculating your tax payable:

Instance: Allow us to perceive the whole course of with the assistance of an instance

Mr. Arun is a taxpayer who earned earnings underneath the pinnacle ‘Enterprise and Career’.

  • Estimated Gross Receipts for the monetary 12 months– ₹ 22,00,000
  • Estimated Bills associated to earnings earned- ₹ 10,00,000
  • Funds from which TDS is to be deducted – ₹ 4,00,000
  • Curiosity Earnings- ₹ 50,000

Allow us to calculate the legal responsibility now:

Particulars Quantity (₹)

Gross Receipts for the Monetary Yr


Bills Associated to the Earnings Earned


Earnings From Career

(22,00,000 – 10,00,000)

= 12,00,000

Income From Other Sources – Curiosity on Fastened Deposit


Whole Earnings Chargeable to Tax


Much less: Deductions underneath Chapter VIA

Funding in PPF Account

– 50,000

Funding in ELSS Mutual Funds

– 70,000

Funding in Tax-Saving Fastened Deposit

– 30,000

Deduction underneath Part 80D

– 30000

Whole Taxable Earnings

= 10,70,000

Tax Payable


Much less: TDS Deducted by different taxpayers

(4,00,000 x 10%)

= 40,000

Tax Payable in Advance


Advance Tax Late Cost and Curiosity

Curiosity is charged for failure of paying advance tax underneath Part 234C. From the due date of every instalment till the day of precise cost, curiosity is utilized at a price of 1%. This is the listing of all of the relevant rates of interest and the way curiosity is calculated:

If a taxpayer has not chosen to make use of presumed earnings:

Easy Curiosity       Interval of Curiosity Quantity on which curiosity is calculated

If Advance Tax paid on or earlier than June 15 is lower than 15% of the Web Quantity*

1% per thirty days

3 months

15% of Web Quantity* (-) tax deposited earlier than June 15

If Advance Tax paid on or earlier than September 15 is lower than 45% of Web the Quantity*

1% per thirty days

3 months

45% of Web Quantity* (-) tax deposited earlier than September 15

If Advance Tax paid on or earlier than December 15 is lower than 75% of Web Quantity*

1% per thirty days

3 months

75% of Web Quantity* (-) tax deposited earlier than December 15

If Advance Tax paid on or earlier than March 15 is lower than 100% of Web Quantity*

1% per thirty days

Until the date of precise cost.

100% of Web Quantity* (-) tax deposited earlier than March 15

*Web Quantity = Tax legal responsibility on whole earnings chargeable to tax (-) tax paid

Tax Paid by way of aid, TDS, TCS, or Tax Credit score

Course of to pay advance tax on-line?

Any licensed financial institution department which has been given the go-ahead by the Earnings Tax Division is the place advance tax funds might be made offline. An alternate is to pay advance tax cost on-line.

Under are the steps for cost of advance tax on-line:

  1. Go to the Tax Info Community web site at
  2. Click on on ‘Proceed’ underneath ‘Challan No./ITNS 280’ underneath ‘Non TDS/ TCS’
  3. Enter the data on the display to generate the challan

Tax Relevant

  • For Firms- choose ‘(0020) Company Tax (Firms)’
  • For Aside from Firms- choose ‘(0021) Earnings Tax (Aside from Firms)’

Sort of Cost

Select ‘(100) Advance Tax’ from the out there choices to make the cost.

Mode of cost

Select your most well-liked cost technique; you should use a debit card or internet banking choice. In all conditions, you should select the “Financial institution Title” choice from the drop-down field.

  • Enter your PAN (Everlasting Account Quantity) particulars
  • Enter the Evaluation Yr. Choose the evaluation 12 months very rigorously. An incorrect AY would want a rectification by making use of to the assessing authority. Be very cautious to keep away from any trouble.
  • Enter your tackle with metropolis/ district, state, and PIN Code being obligatory fields and your e-mail ID and cellular quantity
  • Enter the captcha code displayed on the display
  • Click on on Proceed
  1. You may be to the financial institution’s web site to finish the transaction
  2. After finishing the cost, you’ll obtain the financial institution receipt. The financial institution receipt will include the BSR code and challan serial quantity. Make certain for the long run reference you save the challan copy.

The right way to obtain advance earnings tax cost receipt?

To view the advance tax cost challan, go to Choose CIN (Challan Identification Quantity) Primarily based View. Enter the required particulars, and click on on ‘View’. As soon as the challan data is seen on the display, you might have the choice of printing it off or saving a screenshot. By accessing the web site of the financial institution the place the advance tax cost was made, taxpayers also can obtain the receipt or challan for the advance tax cost. There will likely be a option to obtain the receipt for the advance cost.

Exemption in Advance Tax Funds

  • Senior residents (who’s aged 60 years and above) and who rank as senior residents and who additionally don’t personal enterprise institutions of any variety are those that are at all times exempted from making advance tax funds.
  • The advance tax will not be due from salaried individuals who fall contained in the TDS internet. Nevertheless, advance tax will likely be charged on any earnings generated from sources together with capital positive aspects, curiosity earnings, rental earnings, and different non-salary sources of earnings.
  • If TDS deducted is greater than the tax payable for the 12 months, then one doesn’t must pay the advance tax.
  • Advance tax might also not be paid by tax payers who select presumptive schemes wherein enterprise earnings is at all times assumed to be round 8% of the turnover.
  • Enterprise homeowners with a turnover of lower than INR 2 crore might use presumptive schemes. Sections 44AE and 44AD cope with the presumptive scheme of paying earnings tax. Such schemes might be simply opted by enterprise individuals whose annual enterprise turnover is lower than 2 cores. Whereas the presumptive scheme for advance tax funds are normally reserved for enterprise individuals alone, such a scheme has very just lately been prolonged to architects, legal professionals and docs within the monetary 12 months 2016 to 2017 offered their yearly receipt totals to a most of Rs.50 lakhs.
Refund of Advance Tax

On the finish of the monetary 12 months, in case the Earnings Tax Division finds out that you’ve paid extra tax than you need to have paid, then the IT division will refund the surplus quantity paid. By submitting the Type 30 the taxpayers can declare the refund. The taxpayer must file declare inside a interval of 1 12 months from the final evaluation 12 months.

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