Advance Tax Payment: A Comprehensive Guide – NewsRoomUS

Advance tax is tax payable by an Assessee if the full computed tax for the yr is greater than Rs 10,000 & who’ve sources of revenue aside from their wage. That is relevant to lease, capital beneficial properties from shares, mounted deposits, lottery winnings, and so on. It may be paid on-line or via sure banks.

The ‘Pay as you Earn’ plan is one other title for advance tax. In case your tax legal responsibility exceeds ₹ 10,000 in a monetary yr, you need to pay the advance tax. The yr wherein the revenue is the obtained in the identical yr the tax needs to be paid.

What’s Advance Tax Cost?

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

Tax fee challans can be utilized to pay advance tax at financial institution branches which have been authorised by the Revenue Tax Division. It may be deposited in any of the authorised banks.

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

Who’s liable to pay Advance Tax?

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

As per part 208 of the Revenue Tax Act 1961, each individual whose estimated tax legal responsibility for the yr 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 revenue via enterprise or occupation.

  • Your tax payable needs to be at the least ₹ 10,000 or above.
  • It is best to both be self-employed or salaried.
  • Revenue earned or obtained on via capital gains on shares
  • Mounted deposit curiosity earned.
  • A lottery winner’s winnings.
  • Revenue or lease earned from a home property

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

The ultimate instalment of advance tax fee for Monetary 12 months (FY) 2022-23 is due on March 15, 2023. Taxpayers should pay their total advance tax legal responsibility by or earlier than this due date.

Advance Tax for Taxpayers (other than those who’re lined below 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 kinds 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 correct PAN particulars, or your tax can be positioned within the title of another person.
  • Evaluation 12 months – As a result of the tax is being paid prematurely for the next monetary yr, be sure to choose the right evaluation yr.
  • Selecting a Cost Kind – Within the type, the taxpayer should select a fee kind as given under:
    • It’s advance tax if the tax is paid for a similar fiscal yr primarily based on the estimated revenue.
    • It’s self-assessment tax if the tax is paid after the top of the monetary yr.

A Challan Identification Quantity (CIN) can be equipped after the fee has been obtained. You need to maintain a document of this info and make the most of this CIN when filing your income tax return. Additionally, double-check whether or not the Revenue Tax Division has obtained the web fee which was made via TNS 280.

What’s advance tax challan 280?

On the web site of the Revenue Tax Division of India, Challan 280 allows customers to make on-line revenue 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 Revenue Tax Web site, fill it out, and take it to the financial institution if you wish to pay your taxes offline.

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

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

  1. Estimate your revenue to be earned through the monetary yr

This consists of making an estimate of doable annual revenue one would possibly get. Curiosity revenue, rental revenue, capital beneficial properties, skilled revenue, and every other forms of incomes should all be mixed.

  1. Calculate the associated fee related to the anticipated revenue.
  2. The deductions you plan to make below Chapter VIA needs to be calculated.
  3. Calculate the general tax payable.

Ensure to think about these factors when calculating your tax payable:

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

Mr. Arun is a taxpayer who earned revenue below the top ‘Enterprise and Career’.

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

Allow us to calculate the legal responsibility now:

Particulars Quantity (₹)

Gross Receipts for the Monetary 12 months


Bills Associated to the Revenue Earned


Revenue From Career

(22,00,000 – 10,00,000)

= 12,00,000

Income From Other Sources – Curiosity on Mounted Deposit


Complete Revenue Chargeable to Tax


Much less: Deductions below Chapter VIA

Funding in PPF Account

– 50,000

Funding in ELSS Mutual Funds

– 70,000

Funding in Tax-Saving Mounted Deposit

– 30,000

Deduction below Part 80D

– 30000

Complete Taxable Revenue

= 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 below Part 234C. From the due date of every instalment till the day of precise fee, curiosity is utilized at a charge of 1%. Here 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 revenue:

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% monthly

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% monthly

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% monthly

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% monthly

Until the date of precise fee.

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

*Web Quantity = Tax legal responsibility on whole revenue 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 approved financial institution department which has been given the go-ahead by the Revenue Tax Division is the place advance tax funds might be made offline. An alternate is to pay advance tax fee on-line.

Beneath are the steps for fee of advance tax on-line:

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

Tax Relevant

  • For Corporations- choose ‘(0020) Company Tax (Corporations)’
  • For Apart from Corporations- choose ‘(0021) Revenue Tax (Apart from Corporations)’

Kind of Cost

Select ‘(100) Advance Tax’ from the accessible choices to make the fee.

Mode of fee

Select your most popular fee methodology; you should use a debit card or internet banking possibility. In all conditions, you need to select the “Financial institution Identify” possibility from the drop-down field.

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

The best way to obtain advance revenue tax fee receipt?

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

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 form 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 can be charged on any earnings generated from sources together with capital beneficial properties, curiosity revenue, rental revenue, and different non-salary sources of revenue.
  • If TDS deducted is greater than the tax payable for the yr, then one doesn’t should pay the advance tax.
  • Advance tax can also not be paid by tax payers who select presumptive schemes wherein enterprise revenue 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 take care of the presumptive scheme of paying revenue 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 often reserved for enterprise individuals alone, such a scheme has very lately been prolonged to architects, attorneys and docs within the monetary yr 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 yr, in case the Revenue Tax Division finds out that you’ve paid extra tax than it’s best to have paid, then the IT division will refund the surplus quantity paid. By submitting the Kind 30 the taxpayers can declare the refund. The taxpayer should file declare inside a interval of 1 yr from the final evaluation yr.

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