The deadline of Advanced Tax is near, understand it now otherwise there will be a big blow while filing the return!

• When is the advance tax deadline?
• When can the tax be paid?
• Applicable to whom

Second advance on 15th December Tax As the installment approaches, taxpayers with irregular income like freelancers, investors and small business owners are finding it difficult to decide whether to pay advance tax and how much they should deposit. Taxes for salaried individuals are deducted every month through TDS, but those with irregular income have to do the full calculation mid-year to avoid interest and huge lump sum payments.

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Who has to pay Advance Tax?

Advance tax applies to those whose total tax liability for the year is more than ₹10,000 after deducting TDS. Avnish Arora, Executive Director, Direct Tax, Forvis Mazars India explains that this rule applies equally to both salaried and non-salaried. For salaried individuals most of the tax is covered by TDS, but advance tax is required if TDS falls short. This tax applies to all income including salary, business income, rent, interest and capital gains. Resident senior citizens above 60 years of age are exempt if they have no business or professional income.

Why is December 15th the most important date?

Taxpayers are required to deposit at least 75% of estimated tax for the entire financial year by December 15. This is the largest and most important advance tax installment. Avnish Arora According to , if 75% of the tax is not deposited by this date, interest under Section 234C of the Income Tax Act is levied, even if the balance is paid later while filing the tax return. This delay is particularly critical for those with volatile income such as capital gains or project-based income.

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What happens if the deadline is missed?

If in advance tax Interest is a direct consequence of non-payment on time or underpayment. Interest is charged on delay under section 234C and additional interest is also charged under section 234B if the advance tax paid for the entire year is too less. Moreover, you may suddenly have to pay a large amount while filing your return, which can mess up your entire tax planning. Arora explains that after deducting TDS and other credits, the remaining tax is to be paid as self-assessment tax, but if the advance tax paid is too low, a higher interest is charged on this remaining tax.

Note – This article is written for general information only and does not claim to be a cure of any kind. Consult your doctor before taking any remedy and use it in proper dosage as per his advice.