Advance Tax

Last updated on September 13th, 2023 at 09:01 pm

Advance Tax

Collection from direct and indirect taxes is the major source of revenue for the Government. Any government needs to earn revenue for the smooth functioning of the nation just like we need funds/income for the smooth functioning of our livelihood.  Like we earn income regularly (installments) and not lumpsum, taxes should also be paid regularly in installments and not lump sum payments.

Advance tax

(Section 208 of Income Tax Act 1961)

If your estimated tax liability exceeds Rs 10,000/- you are required to pay advance tax in different installments before the predetermined due dates. While calculating the estimated liability taxpayer shall take into consideration deductions u/s 80, rebate u/s 87A, and tax deducted at source.

Are senior citizens liable for payment of advance tax?

Resident senior citizens not having business income are exempted from paying advance tax even if the tax liability is exceeding Rs 10,000/-.

Are NRI & RNOR liable for payment of advance tax?

Provisions of section 208 are also applicable to RNOR and NRI for the income earned in India. 

What is the due date of advance tax?|What is the percentage of tax to be deposited in advance? 

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Note: Any tax paid up to 31^st March of the financial year will be treated as advance tax.

Note: Taxpayers opting for the presumptive taxation scheme under section 44AD or section 44ADA have to pay the whole amount of tax in advance up to 15^th March of the financial year.

Which form is to be used for payment of tax in advance?

Challan No. ITNS 280 is the form to be used for payment of tax in advance. Taxpayers should be careful while providing the details of PAN, assessment year, and selecting the type of payment.

Is there any penalty for failure in payment/short payment of advance tax on due dates?

Yes, if you miss paying tax within the prescribed due dates or there is a shortfall from the prescribed percentage of tax to be paid then interest u/s 234B and 234C will be levied. 

Which banks are available for tax payments on the e-Filing Portal?

The following banks are available at e-Pay Tax service at the e-Filing Portal

1. Axis Bank
2. Bank of Baroda
3. Bank of India
4. Bank of Maharashtra
5. Canara Bank
6. Central Bank of India
7. City Union Bank
8. Federal Bank
9. ICICI Bank
10. IDBI Bank
11. Indian Bank
12. Indian Overseas Bank
13. IndusInd Bank
14. Jammu & Kashmir Bank
15. Karur Vysya Bank
16. Kotak Mahindra Bank
17. Punjab National Bank
18. UCO Bank
19. Union Bank
20. HDFC Bank
21. Punjab and Sind Bank
22. State Bank of India

You may also like:

• Alternate tax regime u/s 115BAC of the Income Tax Act
• Applicability of interest u/s 234A,234B and 234C

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CA Ankita Khetan

Founder at Financepost.in

Chartered Accountant in practice, DipIFRS (from ACCA, UK), Post Graduate in Commerce, Certified Independent Director (from IICA), and holds a certification in Forex and Treasury Management course (by ICAI).

She can be contacted at info.financepost@gmail.com

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Disclaimer: The above content is for general info purpose only and does not constitute professional advice. The author/ website will not be liable for any inaccurate / incomplete information and any reliance you place on the content is strictly at your risk.

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