Income Tax News: Attention Taxpayers! Non Payment of Advance Tax On Time Can Result in Penalties, Check Dates

Income Tax News: Individuals with an estimated tax liability of Rs 10,000 or more in a financial year are required to pay advance tax in India. This tax is paid in four installments throughout the year to minimize the burden of paying a large sum at once. The upcoming deadline for the last installment is March 15th.

Who Needs to Pay Advance Tax?

• Individuals earning income from various sources, including:
• Business or profession (lawyers, doctors, accountants, etc.)
• Interest on investments
• Dividends from shares
• Capital gains

Exemptions

• Senior citizens with no business or professional income are not required to pay advance tax.
• Salaried individuals whose tax liability is deducted by their employer (TDS) generally don't need to pay additional advance tax unless they have other sources of income.

Installment Schedule and Interest Implications

Advance tax is paid in four installments:

• 15% by June 15th
• 45% by September 15th
• 75% by December 15th
• Remaining 25% or 100% by March 15th

Interest is charged if the advance tax paid falls below specific percentages by certain deadlines:

• Less than 12% by June 15th
• Less than 36% by September 15th
• Less than 75% by December 15th

Presumptive Taxation Scheme

Self-employed individuals and small businesses opting for the presumptive taxation scheme with an annual turnover up to Rs 2 crore (businesses) or Rs 50 lakh (professionals) can pay their entire advance tax liability in one installment by March 15th.

Missing the Deadline?

While the deadline is March 15th, you can still pay the tax until March 31st with just one month's interest penalty. However, any payment made after March 31st will be considered late and will incur a penalty of 1% per month for the delay.