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Advance tax penalty: What is the penalty for missing advance tax payment due date

The deadline for paying the latest advance tax instalment is September 15, 2023, and you can make the payment both online and offline. Advance tax is to be paid in four instalments, in the last month of each quarter on or before the 15th.

According to section 208 of the Income tax Act, 1961, advance tax must be paid by all taxpayers with projected tax liabilities of at least Rs 10,000 (after tax deducted at source, TDS) from the preceding year.

What is advance tax?

Advance tax is income tax paid in advance during the fiscal year rather than at the end of the year. The tax laws specify when this must be paid throughout the year. This tax is paid in installments throughout the fiscal year. Advance tax is also known as “pay as you earn” tax.

What is the penalty for missing Advance tax payment

Penal interest under sections 234B and 234C is applicable for default in payment of advance tax A penal interest of 1% per month or part thereof is levied in each section. Section 234B is levied for delays in advance tax payment or shortfall in tax payment. Section 234C is applicable for non payment or short payment of individual advance tax instalments.

Who has to pay advance tax
As per section 208, every person whose estimated tax liability for the year is Rs. 10,000 or more, shall pay his tax in advance, in the form of “advance tax”.

Who does not have to pay advance tax
However, a resident senior citizen i.e., an individual of the age of 60 years or above during the relevant financial year not having any income from business or profession is not liable to pay advance tax, stated the income tax department’s website.

Advance tax due dates

  • On or before June 15 of each fiscal year, 15% of the advance tax must be paid.
  • On or before September 15, 45% of the advance tax (less tax previously paid) must be paid.
  • On or before December 15th, 75% of the advance tax (minus tax already paid) is due.
  • On or before March 15th, 100% of the advance tax (minus tax already paid) is due.

For taxpayers who have selected the presumptive taxation system, the whole amount of advance tax must be paid on.

How to pay Advance Tax

Step 1: Visit Income tax website https://www.incometax.gov.in/iec/foportal/
Step 2: Click on e-Pay tax, enter PAN, mobile number and click continue. Enter OTP received on registered mobile number
Step 3: Click on Advance tax
Step 4: Select assessment year, and select advance tax from drop down
Step 5: Enter tax amount and continue. Select payment options and click continue
Step 6: Click on Pay Now to make payment.

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