Why Advance Tax important to pay- Due Dates

If the Income Tax Liability of any taxpayer (Excluding salaried individuals) is more than Rs. 10,000/- in a financial year , then tax is payable in installments ;

Advance tax has to be paid on the 15th of September, December and March— in installments of 30%, 30% and 40%, respectively—for self employed and businessman. Companies need to pay it on the 15th of June, September, December and March.

Payment of advance tax: Self employed and businessmen

Due date of installment	Amount payable
On or before 15th September	Not less than 30% of the advance tax liability
On or before 15th December	Not less than 60% of the advance tax liability
On or before 15th March	100% of the advance tax liability

Payment of advance tax: Companies

Due date of installment	Amount payable
On or before 15th June	Not less than 15% of the advance tax liability
On or before 15th September	Not less than 45% of the advance tax liability
On or before 15th December	Not less than 75% of the advance tax liability
On or before 15th March	100% of the advance tax liability

Interest penalty-in case missing deadlines-

If you fail to pay or the amount you’ve paid is less than the mandated 30% of the total liability by the first deadline (15 September), you will need to pay an interest. This is computed @ 1% simple interest per month on the defaulted amount for three months ,The same interest penalty would apply if you fail to pay the second deadline (15 December). Failing to pay the third and last deadline (15 March) would mean paying 1% simple interest on the defaulted amount for every month until the tax is fully paid.as per Section 234B and 234C

1.  Interest  under  section  234C  –  Interest  @  1%  per  month  is  payable  if  the  tax  is  not  paid  as  per  the  aboveschedule i.e. for Deferment in Installments of Advance Tax

2.  Interest  under  section  234B  –  Interest  @  1%  is  payable  if  90%  of  the  tax  is  not  paid  before  the  end  of  thefinancial year i.e. for Default in Payment of Advance Tax.

Treatment in case of excess payment of Advance Tax -

If the amount paid as advance tax is higher than the total tax liability, the assessee will receive the excess amount as a refund. Interest @ 6% per annum will be paid by the Income Tax department to the assessee on the excess amount if the amount is more than 10% of tax liability.

Computation of Advance Tax

Advance Tax is liable to be paid by estimating the current year income and then applicable Tax Slabs in force. The Advance Tax shall be computed as under:-

Income under the 5 Heads of Income                                          ***

(Less) Brought Forward Losses and Allowances                             ***

(=) Gross Total Income                                                                   ***

(Less) Chapter VI­ A Deductions                                                     ***

(=) Estimated Total Income                                                              ***

Income Tax  on Estimated Total Income                     xxx

(Add) Surcharge (if any) on the above Estimated Income  xxx

(=) Total Tax Payable                                                      xxx

(Less) Relief under section 89                                          xxx

(=) Tax Liability                                                               xxx

(Add) 2% Education Cess                                               xxx

(Add) 1% SHEC                                                            xxx

(=) Total Tax Liability                                                      xxx

Less) Relief of tax u/s 90,90A,91                                    xxx

Less) MAT Credit u/s 115JAA                                       xxx

Less) TDS as shown in Form 16/Form 16A 

          and reflected in Form 26AS                                  xxx

(=) Advance Tax Liability                                               xxx

For all taxpayers earning income from any source other than salary, Advance Tax is payable in installments as explained above,

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