Advance Tax due dates AY 2023-24
In this article we will discuss Advance Tax due dates AY 2023-24 as per Income tax Act of India , Who should pay advance tax and when, How to calcuate Advance tax Liability , What are the consequeces of not paying Advance Tax or paying less then required.
Why Advance Tax is paid
Advance tax is a type of tax under Income tax Act of India that has to be paid in advance by taxpayers who have an estimated tax liability of more than Rs. 10,000 in a financial year
What are Advance Tax due dates AY 2023-24
Advance tax is to be paid in different instalments. The due dates for payment of different instalments of advance tax are as follows:
|Status||By 15th June 2022||By 15th Sept 2022||By 15th Dec 2022||By 15th March 2023|
|All assesses (other than the eligible assessee as referred to in Section 44AD or section 44ADA)||Up to 15% of advance tax||Up to 45% of advance tax||Up to 75% of advance tax||Up to 100% of advance tax|
|Taxpayers who opted for presumptive taxation scheme of section 44AD or section 44ADA||Nil||Nil||Nil||Upto 100% of|
Note 1: Any tax paid till 31st March 2023 will be treated as advance tax.
Note 2: If the last day for payment of any instalment of advance tax is a day on which the banks are closed, then the taxpayer should pay the advance tax on the immediately following working day [Circular No. 676, dated 14-1 -1994].
Note 3 If the notice of demand issued under section 156 in pursuance of an order of the Assessing Officer under section 210 (3) and Section 210(4) is served after any of the due dates the whole of the amount of the advance tax specified in above table ,the whole of the amount of the advance tax specified in such notice shall be payable on or before each of such of those dates as fall after the date of service of the notice of demand.
Who is required to Pay Advance tax for AY 2023-24 ?
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”. In this part you can gain knowledge on various provisions relating to payment of advance tax by a taxpayer.
What are the Person who not liable to pay advance tax for AY 2023-24 ?
As discussed above, every person whose estimated tax liability for the year is Rs. 10,000 or more is liable 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.
How to calcuate Advance Tax for AY 2023-24
Note : Advance tax clauclation can change if you opt New Taxation regime in Income tax u/s 115BAC
Compute the amount of advance tax to be paid by Mr. Kapoor (age 35 years) from the following details provided by him (for the year FY 2022-23 /AY 2023-24):
- Taxable business income Rs. 10,84,000.
- Interest on debenture Rs. 9,000 (after deduction of tax at source of Rs. 1,000).
- Investment in NSC during the year Rs. 80,000.
- He has paid tuition fees of his son of Rs. 1333.
Computation of taxable income and tax liability of Mr. Kapoor for the AY 2023-24 :
|Profits and gains of business or profession|
Taxable business income
|Income from other source|
Debenture interest (Rs. 9,000 net interest + TDS of Rs. 1,000)
|Gross total income||10,94,000|
|Less: Deduction under section 80C (NSC and tuition fees)||81,333|
|Total Income (i.e. Taxable Income)||10,12,667|
|Tax on Rs. 10,12,667 (*)||1,16,300|
|Less: Rebate under section 87A (lower of 100% of tax or Rs. 2,500)||Nil|
|Tax liability after rebate under section 87A||1,16,300|
|Add: Health and Education cess @ 4%||4,652|
|Tax liability before TDS||1,20, 952|
|Less: Tax deducted at source||1,000|
|Tax liability after TDS||1,19,952|
(*) The normal tax rates for the financial year 2022-23 AY 2023-24 applicable to an individual below the age of 60 years are as follows:
- Nil up to income of Rs. 2,50,000
- 5% for income above Rs. 2,50,000 but up to Rs. 5,00,000
- 20% for income above Rs. 5,00,000 but up to Rs. 10,00,000
- 30% for income above Rs. 10,00,000.
Apart from above, health and education cess at 4% will be levied on the amount of 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”. In this case, the tax liability amounts to Rs. 1,19,952 and, hence, Mr. Kapoor is liable to pay advance tax.
The due dates for payment of different installments of advance tax in case of all assessees (other than the eligible assessees as referred to in Section 44AD)are as follows:
|By 15th June 2022||By 15th Sept. 2022||By 15 Dec 2022.||By 15th March 2023|
Considering the above due dates, the advance tax to be paid by Mr. Kapoor on different dates will be as follows:
His first installment of advance tax will fall due on 15th June, 2021. His estimated tax liability for the year is Rs. 1,19,952 (for easy computation, liability is rounded off to Rs. 1,19,950). By 15th June, he should pay 15% of his liability in advance, hence, he should pay Rs. 17,993 on account of advance tax by 15th June, 2022.
His second installment of advance tax will fall due on 15th September, 2022. His estimated tax liability for the year is Rs. 1,19,952 which is rounded off to Rs. 1,19,950.
By 15th September he should pay 45% of his tax liability in advance, i.e., Rs. 53,978. Assuming that he has already paid Rs. 17,993 as advance tax by 15th June, he should pay balance of Rs. 35,985 on account of advance tax by 15th September, 2022. Thus, total payment of advance tax till 15th September will amount to Rs. 53,978.
His third installment of advance tax will fall due on 15th December, 2022. His estimated tax liability for the year is Rs. 1,19,952 which is rounded off to Rs. 1,19,950. By 15th December, he should pay 75% of his liability in advance, i.e., Rs. 89,963. Assuming that he has already paid Rs. 53,978 as advance tax by 15th September, he should pay balance
of Rs. 35,985 on account of advance tax by 15th December, 2022. Thus, total payment of advance tax till 15th December will amount to Rs. 89,963.
His fourth and final installment of advance tax will fall due on 15th March, 2023. His estimated tax liability for the year is Rs. 1,19,952 which is rounded off to Rs. 1,19,950. By 15th March, he should pay 100% of his liability in advance, i.e., Rs. 1,19,950. Assuming that he has already paid Rs. 89,963 as advance tax by 15th December, he should pay balance of Rs. 29,988 on account of advance tax by 15th March, 2023. Thus, total payment of advance tax till 15th March will amount to Rs. 1,19,950.
How to Pay Advance Tax for AY 2023-24
As per Rule 125 of the Income-tax Rules, 1962 a corporate taxpayer (i.e., a company) shall pay taxes through the electronic payment mode using the internet banking facility of the authorised banks.
Taxpayers other than a company, who are required to get their accounts audited, shall pay taxes through the electronic payment mode / Online using the internet banking facility of the authorised banks.
Any other taxpayer can pay tax either by electronic mode or by physical mode /Offline i.e. by depositing the challan at the receiving bank.
You can make the payment using net banking or debit card
you can pay advance tax online on govt website https://www.incometax.gov.in/iec/foportal
Watch Video on
How to pay Advance Tax challan for AY 2023-24
Whether Payment of Advance Tax is mandatory . What are the consequeces of not paying Advance Tax or paying less then required .
Payment of Advance Tax in Income Tax is mandatory . The consequences of not paying advance tax or paying less than required are:
- You have to pay interest at 1% per month for non-payment or short payment of advance tax under section 234B
- You have to pay interest at 1% per month for delay in payment of advance tax instalments under section 234C
- You may receive a notice from the assessing officer under section 210(3) to pay advance tax on your current year’s income before the last date of February
- if a taxpayer fails to pay advance tax, he may face prosecution under section 276C of the Income Tax Act. If a person wilfully attempts in any manner whatsoever to evade the payment of any tax, penalty or interest under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to 2 years and shall, in the discretion of the court, also be liable to fine.. However, there are some exceptions and conditions for this provision.
Advance Tax payment by Salaried Employee
Normally TDS is deducted from Salary Income by Employer but there may be other Income like Rental Income, Bank FDR Interest Income etc , Therefore salaries employee have to calcuate their estimated Income for the entire financial year and tax liability and then they can reduce TDS deducted by employer to arrive at the net Tax liability. This Tax liability if exceeds Rs 10000 then advance tax has to paid by employees also.
Other provison for Payment of advance tax for AY 2023-24
Advance tax can be paid by the taxpayer either on his own account or in pursuance of an order of the Assessing Officer.
The taxpayer who is liable to pay advance tax is required to estimate his current income and pay advance tax on his own account. In such a case, he is not required to submit any estimate or statement of income to the tax authorities.
After making payment of first or second or third instalment of advance tax (as the case may be), if there is a change in the tax liability, then the taxpayer can revise the quantum of advance tax in the remaining instalment(s) and pay the tax as per revised estimates.
Tax can be computed on the current income (estimated by the taxpayer) at the rates in force during the financial year. From the tax so computed, tax deducted or collected at source will be deducted and the balance tax payable will be used to compute the advance tax liability. Also, relief of tax allowed under section 90 or section 90A or any deduction
under section 91 or any tax credit allowed to be set off as per section 115JAA or section 115JD shall also be deducted while computing the advance tax liability.
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