Deadline to pay advance tax ends tomorrow: Here is a step-by-step guide

The month of March has its own significance in many ways. Be it in terms of being considered the last month for making tax saving investments or return filing or discharging taxes due for the year and so on. Amongst these, this month also stands out as crucial for those who must pay taxes in advance or what is called ‘advance taxes’.

Advance taxes are, as the name suggests, advance tax is simply a tax paid in advance. In general, tax return for income earned in the financial year i.e., 12 month period starting on April 1st and ending on 31st March will be filed in the next financial year. However, the government has designed a mechanism to collect taxes at regular intervals to ensure cash inflow throughout the year. This helps the government meet expenses in time. And avoids collection of taxes after the year end in one lump sum. Tax paid for income earned in financial year in the same financial year before filing return of income, at specified intervals, is advance tax. Further, advance tax must be paid if you still have a taxes payable of Rs 10,000 or more after considering the TDS, which has already been deducted. To explain this further, the salaried class generally would not have to pay advance tax unless they have income other than salary, because TDS is already made by their employer. However, if they have incomes such as rental or interest income on which TDS has not been deducted, advance tax would apply.

Advance tax payment

The income tax laws specify that a certain percentage of advance taxes be discharged on certain specific dates during the year. The below table discusses these details:

Due date of installment                       Advance tax payable

On or before 15 June                            15% of total tax liability

On or before 15 September                 45% of total tax liability

On or before 15 December                  75% of total tax liability

On or before 15 March                          100% of total tax liability

Further, any amount paid on or before 31st March would be treated as advance tax.

Also to note that if you are a senior citizen aged 60 years or more not having any income from a business or profession, you don’t have to pay advance taxes.

Further, another exception to the rule of applicability of advance taxes is for those who opt for the presumptive taxation scheme under Section 44AD or 44ADA who can pay the entire advance tax on or before 15th March of financial year at once.

Any default /delay in paying advance tax would attract interest under Sections 234B and 234C. At the same time, any excess payment for any quarter can be adjusted against the liability of other quarters of the year or claimed as refund as the case may be.

Steps to pay advance tax

As 15 March 2018 which is the due date for payment of the last installment of advance taxes for individuals, one needs to know how to go about paying the same. The steps involved in payment of advance taxes have been discussed in the ensuing paras.

Advance tax can be paid either online or offline through any of the authorised bank branches. However, any individual covered under tax audit can only pay tax electronically. Concerned challan for the payment of advance tax is ITNS 280. Authorised bank branch details can be found using the link ‘http://www.tin-nsdl.com’ and navigate to the following path:

Services > OLTAS > Bank Branch . Then select State and location.

Online mode - In order to pay taxes using electronic mode, taxpayer should have net banking enabled account in any of the authorised bank. E-payment of tax can also be made by using debit card, however, only 5 banks are authorised for this purpose (ICICI, HDFC, Indian bank, Punjab National and SBI). In case taxpayer does not have net banking enabled account or debit card of above banks, payment of tax can be made in taxpayers name by any other person having net banking enabled account or debit card of an authorised bank. Steps for e-payment of taxes are as follows:

1. Visit http://www.tin-nsdl.com

2. Under Services tab select ‘e-payment: Pay Taxes Online’

3. Select CHALLAN NO./ITNS 280

4. Fill the challan as below:

• Select Tax applicable as ‘(0021) Income Tax (Other than Companies)’
• Enter Permanent Account Number (PAN)
• Choose Assessment Year (AY)- Year immediately succeeding the financial year for which advance tax is being paid - On going AY is 2018-19
• Enter address, Email ID and Mobile Number
• Select Type of Payment as ‘(100)Advance Tax’
• Choose mode of payment either net banking or debit card and select bank
• Type captcha image displayed and click on proceed
• Name corresponding to PAN entered will be displayed on the next screen. If the name appeared is not correct, kindly re-check PAN entered
• If the name appeared is correct, click on ‘submit to the Bank’
• You will be redirected to your bank’s website. Login in case you have chosen net banking. If debit card payment is chosen no login is required to your bank account.
• Enter amount of income tax, surcharge if any and education cess in the challan and complete the payment using your bank/card details
• Challan receipt will be generated and it contains Challan Identification Number (CIN), tax paid and other details. Hard and Soft copy of challan receipt may be saved for records and further requirement. Please note that CIN need to be entered under tax paid details in ITR form while filing return of income.
• Offline/Physical mode - Download and fill the challan ITNS 280 as mentioned above and pay tax at your nearest authorised bank branch
   

The author is Founder & CEO ClearTax