Advance Tax Payment, as the name suggests, is the payment of taxes in advance. Any individual or business who has an estimated tax liability of INR 10,000 or more is liable to make advance tax payment. So, this payment of tax installment in advance is called advance tax payment. Section 208 of the Income Tax Act deals with advance tax payment. In this blog, we shall discuss advance tax payment, various laws related to it, and how to make advance payment for tax.
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Table of Contents
What is Section 234A, 234B, and 234C?
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Section 234A: Under the Section 234A of Income Tax Act, interest is levied for delay in filing income return. Or, in simple words, this Section will be levied if the taxpayer files the income return after the due date specified.
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Section 234B: Section 234B of the Income Tax Act is levied on an individual if he/she either has failed to pay advance tax or has paid less than 90% of the assessed tax.
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Section 234C: Section 234C is levied on the person who defaults in the advance tax payment of the installment(s). As per Section 208, the following are the dates on or before which the taxpayer is liable for advance tax payment:
| Date | Advance Tax Payable |
| On or before June 15th | Up to 15% of advance tax |
| On or before September 15th | Up to 45% of advance tax |
| On or before December 15th | Up to 75% of advance tax |
| On or before March 15th | Up to 100% of advance tax |
*It is only for taxpayers who have not opted for presumptive taxation scheme under section 44AD or section 44ADA
How to Calculate Advance Tax?
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Advance tax can be simply calculated on the current income at the current rates during a financial year. Income received in the previous financial year can also be taken into account to calculate the advance tax liability. The professionals, such as lawyers, doctors, etc. and businesses (resident of India) having a turnover or gross receipt of less than INR 2 crores are exempted from the advance tax payment. They can make 100% advance tax payment before March 15th.
Is advance Tax Applicable for salaried?
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Yes, advance tax is applicable for salaried as well, only in case if the tax liability is INR 10,000 or more. However, if the employer is already deducting TDS, the salaried individual is not required to file advance tax liability.
Can we pay Advance Tax Online?
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Yes, the advance tax payment can be made online. According to the law, it is mandatory for the companies and taxpayers (other than companies) who are subject to audit under Section 44AB of Income Tax Act to pay taxes online. The taxpayers other than the two discussed above can make an advance tax payment in physical form.
Can we pay Advance Tax after the due date?
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In case you miss the deadline for the payment of 4th installment on March 15th, you can still pay tax before March 31th. Such payment would still be considered as an advance tax. However, in case of any miss installment(s) or payment of less tax than the specified, interest would be levied as per Section 234A, 234B, and 234C.
How do I pay my Self-assessment Tax Online?
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To make advance tax payment online, follow the below-mentioned steps:
Step 1: Visit Tax Information Network and select Challan 280.
Step 2: Enter the PAN/ TAN as applicable. Further, you are required to fill other relevant information, such as the Tax applicable, type and nature of payment, assessment year, etc.
Step 3: Apart from the detail mentioned above, fill other relevant information – address details, city, PIN code, state, etc.
Step 4: The next step is to choose the mode of payment. The taxpayer can choose either Net Banking or Debit Card.
Step 5: After entering all the above information and choosing the bank, you will have to enter the text (CAPTCHA) as shown on the screen. If the CAPTCHA matches successfully, you would be promoted to process button – the confirmation screen.
Step 6: Now, on the confirmation screen, all the financial details that you entered in the first screen will be displayed along with the database of the Income Tax Department (Masked). At this step, you have to ensure the correctness of all the information displayed. You can proceed to make advance tax payment if all the information is correct.
Step 7: At this step, you will be directed to the payment gateway. If you have chosen Net Banking, enter the ID and password provided by the bank. And if you have chosen Debit Card, enter the card details.
Step 8: A challan receipt will be displayed on the successful payment. The challan receipt will contain CIN (Challan Identification Number), payment and banks details, etc. This challan is the proof that the advance tax payment is made.
What are Income Tax Slabs and Rates for Advance Tax Payment?
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The income tax slabs are defined on the basis of the income of the individual. The income tax slab and rates for the financial year 2018-19 are:
- For individuals (residents and non-residents) who are less than 60 years of age and Hindu Undivided Family (HUF):
| Taxable Income | Tax Rate |
| Up to INR 2,50,000 | Nil |
| INR 2,50,000-5,00,000 | 5% of the amount that exceeds 2,50,000 |
| INR 5,00,000-10,00,000 | 20% of the amount that exceeds 5,00,000 |
| Above INR 10,00,000 | 30% of the amount that exceeds 10,00,000 |
- For Senior Citizens aged between 60-80 years:
| Taxable Income | Tax Rate |
| Up to INR 3,00,000 | Nil |
| INR 3,00,000-5,00,000 | 5% of the amount that exceeds 3,00,000 |
| INR 5,00,000-10,00,000 | 20% of the amount that exceeds 5,00,000 |
| Above INR 10,00,000 | 30% of the amount that exceeds 10,00,000 |
- For Senior Citizens aged more than 80:
| Taxable Income | Tax Rate |
| Up to INR 5,00,000 | Nil |
| INR 5,00,000-10,00,000 | 20% of the amount that exceeds 5,00,000 |
| Above INR 10,00,000 | 30% of the amount that exceeds 10,00,000 |
- For co-operative societies:
| Taxable Income | Tax Rate |
| Up to INR 10,000 | 10% of the Income |
| INR 10,000-20,000 | 20% of the income by which it exceeds 10,000 |
| Above INR 20,000 | 30% of the amount that exceeds 20,000 |
- The income tax for Domestic Companies in India, Firms, and Local Authorities will be 30%.
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