Last date to pay first installment of advance tax announced; check details

The Income Tax (I-T) department has informed taxpayers to pay their first installment of advance tax. Taxpayers have until June 15 to pay 15 per cent of their estimated tax liability.

“Kind Attention Taxpayers! Do remember to pay your first instalment of Advance Tax by the 15th of June, 2023," read a tweet from the tax department.

What is advance tax?

Advance tax is the income tax paid in advance during the financial year instead of paying it at the end. The tax rules prescribe certain dates throughout the year when this must be paid. Advance tax may also be known as "pay as you earn" tax as it is paid in installments during the financial year.

When is it payable?

When the tax payable by a person exceeds Rs 10,000 after deducting the TDS (tax deducted at source), advance tax comes into play. If advance tax is not paid within the due dates, interest is payable on the tax as per the provisions of the Income Tax Act, 1961

Due dates

- 15 per cent of the advance tax should be paid on or before June 15 of the financial year.

- 45 per cent of the advance tax (less tax already paid) should be paid on or before September 15.

- 75 per cent of the advance tax (less tax already paid) should be paid on or before December 15.

- 100 per cent of the advance tax (less tax already paid) should be paid on or before March 15.

How to pay?

-Go to the income tax website.

-Click on ‘e-pay tax’.

-Enter your PAN and password.

-Now, click on “Advance Tax" and choose the payment method.

-You can pay the amount by clicking the “Pay Now" button.

-After the payment is done, you’ll get a receipt as proof of your payment.

What happens if taxpayers fail to pay advance tax?

Failure to pay advance tax or late payment will result in interest charges under Sections 234B and 234C of the Income Tax Act, 1961. The payments must be made on time to avoid penalties.

Overall, advance tax payments ensure a consistent flow of revenue for the government while alleviating the burden of paying taxes in a lump sum for individuals and businesses.

It is also crucial to accurately estimate income and make timely payments to avoid interest and penalties.