Deadline for First Installment of Advance Tax Payment: Details and Eligibility

Deadline for First Installment of Advance Tax Payment: Details and Eligibility

Advance tax is a system where income tax is paid in installments throughout the financial year instead of a lump sum at the end. This approach helps the government maintain a steady flow of income and eases the financial burden on taxpayers by spreading out their tax liability.

Here’s what you need to know about the first installment date and other details:

Advance Tax Payment Dates 2024

The first installment for advance tax for the financial year 2024-25 is due on June 15th, 2024.

Due Dates for Advance Tax Payments

Both individuals and corporates must pay advance tax in four installments during the financial year, which runs from April to March.

1. 1st Installment: 15th June – 15% of the total advance tax liability.
2. 2nd Installment: 15th September – 45% of the total advance tax liability, minus the amount paid in the first installment.
3. 3rd Installment: 15th December – 75% of the total advance tax liability, minus the amount paid in the first and second installments.
4. 4th Installment: 15th March – 100% of the total advance tax liability, minus the amount paid in the first three installments.

Calculating Advance Tax

Advance tax is calculated on the estimated total income of the taxpayer for the financial year, which includes income from all sources such as salary, business, profession, capital gains, etc. Here are the steps:

1. Estimate your total income for the financial year.
2. Calculate the income tax on this estimated income as per the applicable income tax rates.
3. Deduct the tax deducted at source (TDS) and any other credits from the estimated tax liability.
4. The remaining balance is the advance tax that needs to be paid.

Payment of Advance Tax

Advance tax can be paid online through the Income Tax Department’s website or at designated bank branches. Payment options include net banking, debit cards, or visiting the bank.

Consequences of Non-Payment

Failing to pay advance tax on time can result in interest charges under sections 234B and 234C of the Income Tax Act:

• Section 234B: Interest for default in payment of advance tax.
• Section 234C: Interest for deferment of advance tax.

Exemptions

Senior citizens (aged 60 years or above) who do not have any income from a business or profession are exempt from paying advance tax.

Key Points to Remember

• Ensure accurate calculation of your estimated income to avoid penalties.
• Keep track of the due dates to avoid interest charges.
• Utilize online facilities for convenient and timely payment of advance tax.

By following these guidelines, you can effectively manage your tax liabilities and avoid unnecessary penalties.