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Advance Tax Payment: Meaning, Process, Due Dates & Deductions for AY 2023-24

Updated: Dec 17, 2023

Advance Tax Payment: Meaning, Process, Due Dates & Deductions for AY 2023-24
Advance Tax Payment: Meaning, Process, Due Dates & Deductions for AY 2023-24


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Let us unfold the attributes of the answer to What is Advance Tax?

Introducing the concept of Advance tax:

It refers to the payment of taxes before the end of the financial year. If your tax liability exceeds Rs. 10,000, you are required to pay this tax. The payment can be made in installments on specific dates within the same year in which you earned your income. This system ensures a consistent inflow of revenue for the government throughout the year.

Making advance tax payments can be done conveniently through the Online tax payment website of the Income Tax Department or the National Securities Depository (Advance tax NSDL). These platforms streamline the process, allowing you to fulfill your tax obligations efficiently.

By adhering to the advance tax system, you contribute to the smooth functioning of the government's financial operations while ensuring compliance with tax regulations.

Navigating the Advance Tax Payment Process:

1) Access the Tax Information Network:

Visit the official tax information network of the income tax department and locate the option for Challan 280. Click on 'Proceed' to move forward.

2) Enter Personal Information and Payment Details:

In this step, you will provide your personal information and select the type of payment correctly. For individuals paying tax, choose (0021) Income Tax (Other than Companies). Then, select the appropriate type of payment based on your tax liability, such as Advance Tax, Surtax, Tax on Distributed Profit, Tax on Distributed Income, Self-Assessment Tax, or Tax on Regular Assessment. Additionally, select the desired mode of payment, either net banking or debit card. Enter the relevant assessment year (AY) and your complete address. Complete the step by entering the Captcha code and clicking on 'Proceed'.

3) Confirm and Submit the Payment Request:

Review the displayed information to ensure its accuracy. Once verified, submit the payment request to your selected bank. You will then be redirected to your bank's payment page to securely complete the transaction.

4) Here is where you will need to verify the receipt:

After successfully making the payment, you will receive a tax receipt on the subsequent screen. This receipt will provide you with important details, including the BSR code and challan serial number, located on the right side of the challan. Make sure to take note of this information for future reference and record-keeping purposes.

Let us look at the categories that cover who all must pay advance tax.

1) Independent professionals, including doctors, lawyers, architects, and others, who fall under the presumptive scheme outlined in section 44ADA, have a specific requirement for advance tax payment. They are obligated to pay the entirety of their advance tax liability in a single installment on or before the 15th of March. Alternatively, they have the flexibility to settle their entire tax dues by the 31st of March.

2) For taxpayers who have opted for the presumptive taxation scheme under section 44AD, a distinct provision governs their advance tax payment. They are required to pay the entire amount of their advance tax in one installment on or before the 15th of March. Additionally, they have the option to fulfill their tax obligations completely by the 31st of March.

3) Senior citizens, aged 60 years or older, who do not engage in business activities, are granted an exemption from advance tax payment. Therefore, only senior citizens who generate income from business sources are obliged to pay advance tax according to the applicable regulations.

4) Advance tax payment is a mandatory requirement for various types of taxpayers, including salaried individuals, freelancers, and businesses. If your total tax liability for a financial year equals or exceeds Rs 10,000, you are obligated to make advance tax payments. It is important to fulfill this obligation to comply with tax laws and avoid potential penalties or legal consequences.

Advance tax slab pertaining to the advance tax due dates AY 2023-24

To adhere to the advance tax regulations, you must make payments promptly. By 15 June or earlier, at least 15% of your tax liability should be paid. By 15 September, this amount increased to 45%, and by 15 December, it reaches 75%. The full payment is expected by 15 March.

The exact payable amount on each due date varies based on your taxpayer category. In case your income estimates change during the year, you have the flexibility to adjust the advance tax amount accordingly.