Advance Tax Deadline :If your income tax liability is Rs 10,000 or more, then it is mandatory for you to deposit advance tax. You have to pay this tax as per the schedule prescribed by the Income Tax Department. If you do not pay the next installment of advance tax by September 15, 2024, then you may have to pay additional interest of more than 15%.
What is Advance Tax?
Advance tax is a tax that you have to deposit at regular intervals, without waiting till the end of the financial year. If your total tax liability is Rs 10,000 or more, you are required to pay advance tax every quarter. If you are a salaried employee, it is the responsibility of your employer to deduct TDS and deposit it with the Income Tax Department.
Advance Tax Payment Schedule
The dates for payment of advance tax are:
– For the first quarter: June 15, 2024
– For the second quarter: September 15, 2024
– For the third quarter: December 15, 2024
– For the fourth quarter: March 15, 2025
Why is the September 15 deadline important?
If you do not deposit the advance tax for the second quarter by 15 September 2024, the Income Tax Department can charge interest on your outstanding tax under sections 234A, 234B and 234C. This can increase your tax liability by more than 15%.
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Interest under section 234 for non-payment of advance tax
1. Section 234A:If you file your income tax return after the due date or do not file it, interest at the rate of 1% per month will be charged under section 234A.
2. Section 234B:If you do not deposit advance tax up to 90%, then interest at the rate of 1% per month will be charged under this section.
3. Section 234C:If you do not deposit the required advance tax every quarter, interest of up to 3% can be levied under Section 234C.
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How much loss can be incurred by not paying advance tax?
If your tax liability is Rs 25,000 and you do not pay it by July 31, 2025, you will have to pay around Rs 29,500, which is 18% more. Similarly, if your liability is Rs 15,000 and you pay it late, you will have to pay 16% more amount.
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with additional interestHow to avoid,
– Pay advance tax before the deadline of every quarter.
– Estimate your tax liability correctly and pay accordingly.
File income tax return on or before the due date to avoid interest under section 234A.
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Tax ConsultantIf it is deposited then there is nothing to worry about
Adhering to the advance tax deadline is not only legally mandatory, but it also saves you from additional interest and penalty. Keep in mind the quarterly deadline of 15 September 2024 and pay the tax on time so that your pocket is not affected heavily. But if you are a salaried employee and your employer deducts the required TDS from your salary as per the income tax liability and regularly deposits it with the Income Tax Department, then you do not need to worry.
