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Advance Tax in India

Know what advance tax means, the person liable, advance tax due dates, penalties for non-payment on time, interest charged for deferment of advance tax.

Income tax paid in advance instead of lump sum payment at the year-end is termed as the Advance tax. The advance tax payments are made in instalments as per the specified due dates by the income tax department. The flowing receipt of advance tax helps the Government in managing the expenses.

The person liable to pay advance tax: If total tax payable in a financial year is Rs. 10000 or more, then a person has to pay advance tax. All the tax payers are covered by the advance tax. For salaried people, TDS deducted can take care of advance tax payment and hence, rarely any extra payment would arise. Senior citizen (age of 60 years or more) who is not running a business is exempted.

Advance tax for the FY 2014-15 and FY 2015-16 is free for the taxpayers opting for presumptive taxation scheme. However, starting from FY 2016-17, the advance tax has to be paid in one single instalment by such taxpayers on or before 15th March.

Advance Tax payment due dates: For FY 2016-17, the due dates for Individuals and corporate taxpayers are as below:


Advance Tax Due Dates Advance Tax Payable*
On or before 15th June 15%
On or before 15th September 45%
On or before 15th December 75%
On or before 15th March 100%

*Percentage of Advance Tax

Penalty and Interest: Penalty is imposed for non-payment of advance tax on the scheduled time mentioned above. This penalty is paid along with the taxes due before income tax return filing.

Section 234B of Income Tax Act (Interest for non-payment of Advance Tax): If 90% of the tax due is not paid by the financial year end, interest @ 1% is charged.

Section 234C of Income Tax Act (Interest for Deferred Payment of Advance Tax): If the tax is not paid as per the schedule given above, interest @ 1% per month is charged.