Advance tax means income tax should be paid in advance instead of lump sum payment at year end. It is also known as pay as you earn tax. These payments have to be made in installments as per due dates provided by the income tax department.
Who should pay Advance Tax?
Salaried,freelancersand businesses– If your total tax liability is Rs 10,000 or more in a financial year you have to pay advance tax. Advance tax applies to all tax payers, salaried, freelancers, and businesses. Senior citizens, who are 60 years or older, and do not run a business, are exempt from paying advance tax.
Presumptive Businesses– Taxpayers who opt for presumptive scheme where business income is assumed at 8% of turnover of less than ₹2 crore are exempt from advance tax for FY2017-18.
Presumptive income for Businesses for FY 2016-17 – Starting financial year taxpayers who opt for presumptive scheme have to pay whole amount of their advance tax in one installment on or before 15th March. If they pay all of their tax dues by 31st March that is also ok. Starting FY 2016-17. businesses with turnover of Rs 2 crores or less can opt for this scheme.
Presumptive income for Professionalsfor FY 2016-17– Starting FY 2016-17, this scheme has been extended to professionals such as doctors, lawyers, architects etc if their gross receipts are 50 lakhs or less(Section 44ADA). Such taxpayers have to pay advance tax as per quarterly installments.
Read in detail about presumptive taxation here
Want a CA to calculate and help pay your advance tax dues?
FY 2017-18 & FY 2016-17
For both individual and corporate taxpayers
Due Date
Advance Tax Payable
On or before 15th June
15% of advance tax
On or before 15th September
45% of advance tax
On or before 15th December
75% of advance tax
On or before 15th March
100% of advance tax
For taxpayers who have opted for Presumptive Taxation Scheme – Business Income
Due Date
Advance Tax Payable
by 31st March
100% of advance tax
For taxpayers opting for presumptive taxation having business income from plying, hiring or leasing of goods carriages Section 44AE
Due Date
Advance Tax Payable
On or before 15th June
15% of advance tax
On or before 15th September
45% of advance tax
On or before 15th December
75% of advance tax
On or before 15th March
100% of advance tax
For FY 2014-15 and FY 2015-16
Due Date
For corporate taxpayers
For individual taxpayers
On or before 15th June
15% of advance tax
–
On or before 15th September
45% of advance tax
30% of advance tax
On or before 15th December
75% of advance tax
60% of advance tax
On or before 15th March
100% of advance tax
100% of advance tax
Our CAs will calculate your advance tax liability so you can pay your dues on time.
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Frequently Asked Questions
When should I pay advance tax
If your tax liability for a year after reducing TDS is more than Rs 10,000, you will be liable for payment of advance tax
Is an NRI liable for payment of advance tax?
An NRI who has an income accruing in India in excess of Rs 10,000 is liable for payment of advance tax
I am a senior citizen having pension and interest income. Should I pay advance tax?
Resident senior citizens not having income from business or profession are not liable for advance tax.
Will I be penalized if I do not pay advance tax?
Non payment of advance tax will result in levy of interest under 234B and 234C of the Income tax Act, 1961.
Can I claim deduction under 80C while estimating income for determining my advance tax?
Yes. You can consider all these deductions while estimating your income for the year for computing your advance tax liability.
What happens if I miss the deadline for payment of the fourth installment of my advance tax i.e. on 15 March
You can still go ahead with payment of advance tax on or before the 31 March of the year. Such payment will still be treated as advance tax only.
How do I make an advance tax payment
Advance tax payment is made using Challan 280 just like any other regular tax payment. You may read our detailed article on online payment of income tax.
Salaried,freelancers and businesses– If your total tax liability is Rs 10,000 or more in a financial year you have to pay advance tax. Advance tax applies to all tax payers, salaried, freelancers, and businesses. Senior citizens, who are 60 years or older, and do not run a business, are exempt from paying advance tax.
Presumptive Businesses– Taxpayers who opt for presumptive scheme where business income is assumed at 8% of turnover of less than ₹2 crore are exempt from advance tax for FY2017-18.
Presumptive income for Businesses for FY 2016-17 – Starting financial year taxpayers who opt for presumptive scheme have to pay whole amount of their advance tax in one installment on or before 15th March. If they pay all of their tax dues by 31st March that is also ok. Starting FY 2016-17. businesses with turnover of Rs 2 crores or less can opt for this scheme.
Presumptive income for Professionals for FY 2016-17– Starting FY 2016-17, this scheme has been extended to professionals such as doctors, lawyers, architects etc if their gross receipts are 50 lakhs or less(Section 44ADA). Such taxpayers have to pay advance tax as per quarterly installments.
Read in detail about presumptive taxation here
Want a CA to calculate and help pay your advance tax dues?
