Advance Tax payment due date for FY 2022-23/AY 2023-24

This Article discusses provisions related to the payment of Advance Tax. Please note that the due date of Payment of the installment of Advance Tax for the 2nd Quarter of FY 2022-23/AY 2023-24 is 15th Sep 2022.

What is the meaning of Advance Tax?

Usually, tax is paid when income is self-assessed i.e. ITR is filed. ITR filing for a Financial Year Happens after the end of the Financial Year, i.e. in the Assessment Year. Advance Tax means paying Tax for a Particular Financial Year in that FY in which income is earned itself. 

What are the Due Dates for Payment of Advance Tax?

Advance Tax Due Dates for Individual and Corporate Tax Payers:

Advance Tax Due Dates for Individual Taxpayers who have opted for Presumptive Taxation:

100% of Tax Should be Paid on or before 31st March 2021.

What are the Legal Provisions in Income Tax Act related to Advance Tax?

Is there any Exemption From Payment of Advance tax?

• A taxpayer having Tax Liability of up to Rs. 10000 is not required to pay advance Tax.
• Senior Citizens [Having to Age of more than 60 Year] not having income under the head Profits and gains from business [PGBP] are not required to pay advance tax.
• Also usually in the case of salaried employees, TDS is deducted by the employer on their salary income. In such cases, they are also not required to pay Advance Tax.
• Provisions of Advance Tax are applicable on Non-Residents having Income Accrue or arise in India.

How to Calculate Advance Tax Liability?

• Advance Tax liability is calculated on estimated Taxable Income as per Income Tax Act.
• While Calculating the estimated Taxable Income as per Income Tax Act only Specific Deductions as per Income Tax Act are allowed.
  • For Example in the case of a company, while calculating Advance Tax Depreciation as per companies act will be disallowed, and as per Income Tax Act will be allowed.
  • Similarly, Deduction under Chapter VIA is allowable while computing liability of advance tax.

The credit of TDS deducted can be taken while calculating Advance Tax Liability.

How to make Payment of Advance Tax?

• Electronic Payment of Advance Tax can be made Online.
• Visit https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp
• Choose CHALLAN NO./ITNS 280 for Payment of Advance Tax.

Question: What are the penal provisions attracted, if advance tax is not paid/ paid less or is not paid within the prescribed time?

Answer: If the Income Tax is not payable as per the provisions, Interest is liable to be paid for late payment of tax as follows:

1. Interest u/s 234C Interest @ 1% p.m. for a period of 3 months, will be payable for every deferment, except for the last installment of 15th March where it will be 1% for one month is payable if the tax is not paid as per the due dates i.e. for Deferment in Installments of Advance Tax

2. Interest u/s 234B Interest @ 1%p.m. from 1st day of assessment year upto the date of deposit tax & interest is payable if 90% of the assessed tax is not paid or is short paid before the end of the financial year i.e. for Default in payment of Advance Tax.

Question: Can the Income-tax department issue notice to the assessee for payment of Advance Tax?

Answer: Yes. Assessing Officer may pass an order u/s 210(3) of the Income Tax Act 1961 or amended order u/s 210(4) and issue a notice of demand u/s 156 requiring the assessee to pay advance tax.