All about Advance tax

What is Advance tax?

“A stitch in time saves nine” a well proven proverb teaches us to perform all the important things in advance to avoid losses in future. Same doctrine applies for taxes as well. If you pay your Income-tax in advance i.e. before end of Financial Year, you are not required to pay any additional interest thereon. The tax you pay in advance is known as “Advance-tax”.

Why Advance tax is payable?

Advance-tax is applicable to all taxpayers including the salaried class. If the total tax liability for a Financial Year after considering TDS and tax relief is more than Rs. 10,000/-, then it is mandatory to pay Advance-tax by a taxpayer.

Generally Advance tax is payable in the following cases-

  1. Change in job, where salary from previous employer was not disclosed to new employer,
  2. Interest on Fixed deposits with banks,
  3. Capital gain transactions like sale of share, securities, property or other capital assets.

When to pay?

Advance-tax can be paid in following three installments for F.Y. 2015-16:-

(in case of Non-corporate taxpayers)

Due date for payment Amount of advance-tax to be paid
On or before 15th September 30% of tax liability
On or before 15th December 60% of tax liability less earlier paid installment
On or before 15th March 100% of tax liability less earlier paid installments
  • Tax liability is calculated as per the slab rates on Estimated annual income minus TDS and relief, if any.
  • A taxpayer is required to pay 100% of his tax liability before 15th March to avoid payment of interest at 1% of tax liability.

What if I don’t pay?

1% Interest per month is payable for non payment/short payment of Advance-tax u/s 234C of Income-tax Act.

Click here to know about Interest U/s. 234C.

Who are exempted from paying Advance-tax?

Exemption for payment of Advance-tax is applicable to the following:

  1. Senior Citizen who does not have any Income from Business.
  1. Presumptive Business Income u/s 44AD.
  1. Others having Tax Liability less than Rs 10,000/- after considering TDS and Tax Relief on Income.

How do I pay this Advance-tax?

You can pay Advance tax online also. Here is step wise guidance-

  1. Go to website:- https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp
  2. Click on Form 280.
  3. Enter your PAN and other personal details.
  4. Enter type of payment as (100)- Advance tax.
  5. Select your bank and proceed.
  6. Enter details of amount of advance tax.
  7. Provide your bank details and make payment.

Or you can visit a nearby Nationalized Bank and make the payment.

How do I show Advance tax details in my Income-tax return?

You are required to give challan details to your employer before the end of the Financial Year, so that he will consider it in your Form-16 and deduct TDS accordingly. If you miss it, you can further declare it while filing your Income-tax return in Advance Tax section under Tax Paid option.

How can myITreturn.com help?

myITreturn.com provides you a unique advance tax estimator with the help of this you can calculate your exact advance tax liability and pay it within due date. While filing your Income-tax return from here, you can declare all Advance-taxes paid in concerned section and calculate your taxes accurately.

For any support, please feel free to mail us on: myITreturn@skorydov.com

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All about Advance tax
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Advance-tax is applicable to all taxpayers including the salaried class. If the total tax liability for a Financial Year after considering TDS and tax relief is more than Rs. 10,000/-, then it is mandatory to pay Advance-tax by a taxpayer.
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27 thoughts on “All about Advance tax

  1. Birendra Gupta

    I am resident senior citizen. I want to know that tax on capital gain from sell of property is payable as advance tax or not .

    Reply
    1. myITreturn Team - DP

      Dear Sir,
      A resident senior citizen, not having income from any business or profession is not liable to pay advance tax. However, if he is earning income from any business or profession, then he has to compute tax on his estimated income and if the same is more than Rs.10,000 (after deducting amount of TDS) then , he will have to pay advance tax .

      Reply
  2. Josyula Prakash Rao

    I am a retired Railway employee,I was retired on 31_03_2009 from Vijayawada division of South Central Railway
    I have submitted my it returns till my date of retirement
    After retirement I have not submitted it returns
    My gross pension at the time of retirement was RS 10,000/PM(01.04.2009)
    With the increase of two DAs per annum my gross pension as on date
    Is Rs24,600/PM
    .yesterday,I.e on 13_03_2026
    I have received e.mail from income tax for filing income tax retutn
    Hence I have e.filed it returns for 2014_2015 and 2015_2016
    It can be seen that my gross pension does not attract income tax
    As my gross pension is RS 2,80,000/per annum
    Please treat the msg received by me from it Dept is closed

    Reply
    1. myITreturn Team - DP

      Dear Sir,
      In case of senior citizen (Age more than 60 years but less than 80 years ), income upto Rs.3,00,000 is Nil . Hence, your tax liability will be zero if you are not earning any income apart from pension.In such cases, there is no need to file income tax return ,However , you might have filed a Nil return. which is correct, so no need to do anything further.

      Reply
  3. VISWESWARA VS

    Sir, I have filed Income Tax return through your website last year. I would like to arrive what is the total advance tax payable. I am a salaried person and I have given house for rent.

    Reply
    1. myITreturn Team - DP

      Dear Sir,
      If you are liable to pay advance tax but you fail to pay it and pay income tax it will be treated as self assessment tax and not advance tax and you will have to pay interest @ 1% for a month or part of the month from 1st April of the following year till you actually pay self assessment tax. However in case, the short fall in payment of advance tax is not more than 10% of your tax liability, you do not have to pay any interest. In addition to the interest for non payment of advance tax, you will also have to pay interest (@ 1% for a month or part of the month) for default for non payment of each instalment.

      Reply
  4. Sujit Bera

    I had submitted my balance tax for AY 15-16 THROUGH net banking using idbi bank on 11th march 2016 but till now i have not got any confirmation from IT department but the amount is deducted from my account. Can any body please help in how to get confirmation?

    Reply
    1. myITreturn Team - DP

      Dear Sir,
      Did you mention the tax payment details in your income tax return while filing the same? And in order to check the payment of taxes status, just login to income tax department’s website and view form 26AS for AY 2015-16. You will find the details of the taxes paid over there. If the same is not reflected in it , wait for a few days, it will be updated in your form 26AS.

      Reply
    1. myITreturn Team - DP

      Dear Sir,
      In case of firm, same provisions as given above would apply.However, in case of company the slab rates of advance tax are different.Slab rates are as follows for companies:
      Due Date Advance Tax Installment Amount
      15th June 15% of of tax liability
      15th September 45% of tax liability less earlier paid installment
      15th December 75% of tax liability less earlier paid installments
      15th March 100% of of tax liability less earlier paid installments

      Reply
  5. Y.P.singh

    Sir I am Senior citizen. Except arrears of salary ,pension & intt on fixed deposits I have no other income. Total income of above mentioned is Rs. 13.20 lacs.As per 26A ,the tax deducted by employers/banks seems 0.65 lacs. Up to which date I can deposit income tax without paying any intt./penalty.

    Reply
    1. myITreturn Team - DP

      Dear Sir,
      In case your tax liability after deducting TDS is less than Rs.10,000 then there is no need to pay advance tax as so no interest for non-payment or default in payment of advance tax would arise. Also, if you file your return within the due date , i.e 31st July and also pay the taxes, if any, on or before the due date, then no interest or penalty would arise.

      Reply
  6. rahul

    I got maturity amount after 10yr. from lic. I deposited 8lac single premium. what is tax liability. 2% deducted by lic.

    Reply
    1. myITreturn Team - DP

      Dear Sir,
      Starting October 2014, if the amount received is more than Rs 1,00,000, TDS @ 2% shall be deducted by the insurer before making this payment. TDS will also be deducted on bonus payments. If the amount received is less than Rs 1,00,000 no TDS shall be deducted but the amount received shall be fully taxable for you. You can claim credit for the TDS deducted in your Income Tax Return.

      Reply
  7. Usha Bakshi

    I am a resident retired senior citizen. Excepts areas of Pension and Interest on fixed deposits, i have no income. Do i need to file Advance tax and if yes, how do i calculate my tax ? Please Help.

    Reply
    1. myITreturn Team - DP

      Dear Mam,
      In case of senior citizens, if there is no business income, there is no need to pay tax. In your case,as there is no business income, you are not required to pay advance tax.In case you wish to calculate your taxes just login to myitreturn.com .

      Reply
    2. myITreturn Team - DP

      Dear Madam,
      In case of senior citizens, there is no need to pay advance tax if you do not have Business Income. Therefore , you are not liable to pay advance tax.

      Reply
  8. Y.P.singh

    While calculating my income tax it comes Rs.1,70000 whereas only Rs.70000 has been deducted by my employers as shown in 26A. I am senior citizen & have no business income.my question is may I deposit Rs.100000 upto 31st July without paying any intt./penalty ?.

    Reply
    1. myITreturn Team - DP

      Dear User,
      In case of senior citizen, no advance tax is to be payable if you do not have business income.So, yes, if you pay the balance tax of Rs.100000 upto 31st July, no interest and penalty, is payable.

      Reply
  9. Ganesh Lal Joshi

    Sir,
    I am 56 years old and taken VRS from bank. I receive income from pension and interest on term deposites. Pension crediting institution and bank where term deposits placed , both institution deduct Tax at source without taking into account my investments, Whether should I worry about advance tax here?

    Reply
    1. myITreturn Team - DP

      Dear Sir,
      In case of senior citizens, there is no need to pay advance tax if you are not having any business income.In your case, you are not having business income and earning only pension and interest on term deposits from which the concerned banks and institutions are deducting taxes.So , you need not worry about payment of income tax here. But do remember to file your return correctly and to include the TDS deducted.

      Reply
  10. Vijay

    If the employer deducted the tax despite being production of pan card and also levy 20% penal deductions and does not reflects the same in form 16 what is course of action?

    Reply
    1. myITreturn Team - DP

      Dear Sir,
      TDS deducted is required to be shown in form 16 as per format provided by TRACES ,if not then penalty is applicable.
      Nevertheless you can claim TDS while filing return and claim for refund.

      Reply

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