Income Tax News: September 15th is the deadline for taxpayers to make the second installment of advance tax payments for the financial year 2024–2025; failure to do so may result in significant fines. Advance tax payment is mandatory for any individual or organisation whose total tax due, after deducting TDS (Tax Deducted at Source), exceeds ₹10,000. This covers businesses, freelancers and salaried employees.
On the other hand, advance tax is not required of senior individuals over 60 who do not receive revenue from a business. This approach lessens the financial load on taxpayers and guarantees the government receives its money on schedule by distributing tax payments throughout the year.
Advance Tax Payment Schedule for FY 2024-25
To ensure compliance with advance tax requirements, the Income Tax Department has laid out a schedule of four installments:
- 15% of the total tax liability must be paid by June 15.
- 45% by September 15 (upcoming deadline).
- 75% by December 15.
- 100% by March 15.
Taxpayers who fail to meet these deadlines may face significant penalties under Section 234B and Section 234C of the Income Tax Act. Therefore, it’s crucial to stay on top of these dates.
How to Pay Advance Tax Online: Simple Steps
The Income Tax Department offers a convenient online process for taxpayers to pay advance tax. Follow these steps for a hassle-free payment:
- Visit the official Income Tax India e-filing portal.
- Log in using your credentials.
- Under the “e-Pay Tax” option, select Advance Tax.
- Enter your details, including PAN and the relevant assessment year.
- Complete the payment using net banking, debit card, or UPI.
As an alternative, taxpayers can visit specific bank branches and submit Challan 280 to pay advance tax offline.
Penalties for Late Payment of Advance Tax
Missing advance tax payment deadlines can lead to penalties under Sections 234B and 234C of the Income Tax Act.
- Section 234B: Taxpayers who fail to pay 90% of their total tax liability by the end of the financial year will be charged 1% interest per month.
- Section 234C: A penalty of 1% per month will apply if taxpayers miss any of the installment deadlines.
Paying advance taxes on time lowers the chance of these fines, ensuring that taxpayers stay in compliance with the law and don’t incur any further expenses.
Benefits of Paying Advance Tax on Time
Taxpayers who pay in advance can avoid late payment penalties in addition to lessening their overall financial burden at the end of the year. By ensuring a seamless tax filing process, it reduces the possibility of errors in the estimates of tax liability.
For businesses, salaried employees, and freelancers, it is a key strategy in tax planning and an effective way to stay on top of their financial obligations.
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