Who must pay taxes in advance?
Any individual or company whose total tax liability exceeds ₹10,000 after considering TDS (tax deducted at source) must pay the tax in advance.
This applies to salaried employees, self-employed workers and companies.
However, people over 60 years of age who do not have business income are exempt from paying the tax in advance.
The advance tax is paid in four installments throughout the financial year:
- 15% for June 15th
- 45% for September 15th
- 75% by December 15th
- 100% by March 15th
How to pay taxes in advance
Taxpayers can pay advance tax online through the official website of the Income Tax Department or through authorized banks. Here’s how:
- Go to India Income Tax e-filing portal.
- Please log in with your credentials.
- In the “Electronic tax payment” option, select “Advance taxes.”
- Enter the relevant details including PAN and assessment year.
- Complete the payment via online banking, debit card or UPI.
Alternatively, offline payments can be made at designated bank branches by completing Challan 280.
Penalties for non-payment
Failure to pay advance tax on time attracts interest under Sections 234B and 234C of the Income Tax Act.
Under Section 234B, taxpayers are charged interest at 1% per month if 90% of the total tax liability is not paid before the end of the financial year.
Under Section 234C, a penalty of 1% per month is levied if advance tax dues are not paid on time.
Why it is important to pay on time
Paying taxes in advance in instalments reduces the burden at the end of the financial year and helps avoid heavy penalties.
Taxpayers must correctly calculate their tax obligations to avoid discrepancies during filing.
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