Advance Tax Payment & Challan 280 Guide (FY 2024-25 | AY 2025-26)
- Bhavika Rajput
- Jun 20
- 20 min read
Understanding your advance tax payment challan is really important. It helps you steer clear of penalties from the tax department. This guide will walk you through what advance tax is all about. We'll also cover who needs to pay it, how to figure out the amount, and how to pay advance tax online using Challan 280. We will focus on the current Financial Year (FY) 2024-25 and Assessment Year (AY) 2025-26. Staying on top of your tax compliance is a must.
Here's a quick look at what you will learn:
What advance tax means.
Who is responsible for paying advance tax.
How to calculate your advance tax.
The online process for paying advance tax with Challan 280.
Due dates for advance tax installments.
What happens if you don't comply with advance tax rules.
Taxbuddy is skilled in making tax compliance simpler for everyone, whether you're an individual or run a business. This article aims to give you clear information on advance tax and Challan 280. For a general understanding of income tax, you might find it helpful to learn about understanding your income tax obligations.
Table of Contents
What is Advance Tax? Understanding Your 'Pay-As-You-Earn' Tax Obligation
Advance tax is a system where you pay your income tax in parts during the financial year instead of all at once at the end. The advance tax meaning comes from the 'pay-as-you-earn' idea. This applies to income where Tax Deducted at Source (TDS) hasn't been cut, or if the TDS cut was not enough to cover your total tax liability. Think of it like paying small portions of your yearly tax bill as you earn money through the year. This method helps the government get a steady flow of tax revenue. It also makes it easier for taxpayers by not having to pay a huge amount at year-end.
The Income Tax Act, 1961, lays down the rules for advance income tax. Section 208 of this Act states that every person whose estimated tax liability for the year is ₹10,000 or more must pay advance tax. This system is a key part of managing your tax liability effectively. It helps in spreading out your financial responsibilities. It also ensures you follow the tax laws. Understanding what is advance tax is the first step toward smooth tax planning. You can learn more about Tax Deducted at Source (TDS) to see how it relates to your overall tax picture.
Who is Liable to Pay Advance Tax in India? (AY 2025-26)
Determining who should pay advance tax is straightforward. Any taxpayer in India, whether an individual, a Hindu Undivided Family (HUF), a company, or any other entity, must pay advance tax if their total estimated tax liability for the financial year is ₹10,000 or more. This advance tax applicability covers income from various sources. For example, salaried individuals might need to pay if they have other income like capital gains from selling shares or property, rental income, or significant interest income that isn't fully covered by TDS. Freelancers and businesses are also commonly required to pay advance tax. This includes those taxpayers who opt for presumptive taxation schemes under Section 44AD or Section 44ADA of the Income Tax Act.
It's a common question: "Is advance tax for salaried employees a must?" The answer depends on their total income picture beyond just their salary. If income from other sources pushes their tax liability above the ₹10,000 threshold after considering TDS, then yes, they need to pay advance tax. Similarly, advance tax for freelancers is a direct responsibility as their income often doesn't have TDS. For businesses, advance tax for business income is a regular part of their financial management.
The Income Tax Department provides guidelines that help taxpayers understand their obligations. It's always good to refer to these to ensure you are compliant.
Salaried Individuals and Advance Tax
Salaried individuals usually have TDS deducted by their employers. However, if a salaried person has substantial other income, like winnings from a lottery, rent from a house property, or capital gains from investments, and the TDS on salary doesn't cover the tax on this extra income, they must pay advance tax. The key is if the total tax due (after TDS) is ₹10,000 or more.
Freelancers and Professionals
Freelancers and professionals generally have variable income. Their income is often not subject to TDS at the source, or the TDS might be at a lower rate. Therefore, they have a direct responsibility to estimate their annual income, calculate their tax liability, and pay advance tax in installments if the amount is ₹10,000 or more. This helps them manage their tax payments systematically through the year.
Businesses
Businesses, whether small or large, are required to pay advance tax if their tax liability hits the ₹10,000 mark. This includes companies, partnership firms, and sole proprietorships. Even businesses that opt for presumptive taxation schemes under Section 44AD and Section 44ADA must pay advance tax. However, there's a slight difference for them: taxpayers under these presumptive schemes can pay their entire advance tax liability in a single installment by March 15th of the financial year.
Who is Exempt from Paying Advance Tax?
There are specific advance tax exemption rules. A key exemption applies to resident senior citizens. A senior citizen, meaning an individual who is 60 years of age or older at any time during the financial year, does not have to pay advance tax. However, this exemption for senior citizen advance tax comes with a condition. They must not have any income from a business or profession. If a senior citizen has rental income or interest income but no business or professional income, they are exempt from paying advance tax, provided they are a resident.
Section 207 of the Income Tax Act provides this relief to senior citizens. It's a measure to simplify tax compliance for them. If any other specific exemptions are announced by the tax authorities, those would also apply. As of now, this is the primary exemption regarding who is not liable for advance tax.
How to Calculate Advance Tax Liability for FY 2024-25 (AY 2025-26)
To calculate advance tax, you need to make a careful estimate. The advance tax calculation example below provides a general idea, but your own numbers will vary. Here's a step-by-step way to figure out your advance tax liability for the Financial Year 2024-25 (which corresponds to Assessment Year 2025-26).
Estimate Total Annual Income: First, sum up all your expected income from every source. This includes salary, income from house property (rent), profits from business or profession, capital gains (from shares, property, etc.), interest income (from savings accounts, fixed deposits), and any other income you anticipate during FY 2024-25.
Subtract Applicable Deductions: Next, reduce your gross estimated income by the deductions you are eligible for. This means considering deductions under Chapter VI-A of the Income Tax Act, such as those under Section 80C (like EPF, PPF, life insurance premiums, ELSS), Section 80D (health insurance premiums), and others. It’s important to note that the availability of many deductions depends on whether you opt for the Old Tax Regime or the New Tax Regime.
Calculate Income Tax on Net Taxable Income: Once you have your net taxable income (Estimated Total Income minus Deductions), calculate the income tax on this amount. You must use the latest income tax slab rates applicable for AY 2025-26 for your income category (individual, HUF, company, etc.) and chosen tax regime.
Add Surcharge and Cess: To the calculated income tax, add any applicable surcharge. Then, add the Health and Education Cess, which is currently 4% of the income tax plus surcharge.
Subtract TDS/TCS: From this total tax amount, subtract any Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) that has already been or is likely to be deducted/collected during the financial year.
Determine Advance Tax Payable: If the resulting tax liability (after subtracting TDS/TCS) is ₹10,000 or more, this is the amount of advance tax you need to pay.
This advance tax formula helps in how to estimate advance tax. For precise calculations, especially when choosing between tax regimes, you might want to use our income tax calculator. Taxbuddy's platform can simplify these calculations for you. Also, understanding the nuances of choosing between the old and new tax regime is crucial as it impacts your deductions and tax slabs.
Example Calculation 1: Salaried Individual with Other Income
Let's say Priya is a salaried individual.
Estimated annual salary: ₹12,00,000
Estimated rental income: ₹3,00,000
Estimated interest income: ₹50,000
Total Estimated Income: ₹15,50,000
Deductions under Section 80C (Old Regime): ₹1,50,000
Standard Deduction (Old/New Regime): ₹50,000
Net Taxable Income (assuming Old Regime for 80C): ₹15,50,000 - ₹1,50,000 - ₹50,000 = ₹13,50,000
Let's assume tax on this income (using AY 2025-26 slabs, Old Regime) is ₹2,10,000.
Add Health & Education Cess (4% of ₹2,10,000): ₹8,400
Total Tax Liability: ₹2,18,400
TDS deducted by employer (estimated): ₹1,50,000
TDS on interest (estimated): ₹5,000
Total TDS: ₹1,55,000
Advance Tax Payable: ₹2,18,400 - ₹1,55,000 = ₹63,400. Since ₹63,400 is more than ₹10,000, Priya needs to pay advance tax.
Example Calculation 2: Freelancer/Professional
Now, consider Rohan, a freelancer.
Estimated gross professional receipts: ₹25,00,000
Estimated eligible business expenses: ₹8,00,000
Net Professional Income: ₹17,00,000
Deductions under Section 80C (Old Regime): ₹1,50,000
Net Taxable Income (assuming Old Regime): ₹17,00,000 - ₹1,50,000 = ₹15,50,000
Let's assume tax on this income (using AY 2025-26 slabs, Old Regime) is ₹2,77,500.
Add Health & Education Cess (4% of ₹2,77,500): ₹11,100
Total Tax Liability: ₹2,88,600
TDS deducted by clients (estimated): ₹2,50,000 (assuming 10% on gross receipts)
Advance Tax Payable: ₹2,88,600 - ₹2,50,000 = ₹38,600. Since ₹38,600 is more than ₹10,000, Rohan must pay advance tax.
Consideration for Old vs. New Tax Regime
The choice between the Old and New Tax Regime significantly affects your advance tax calculation. The Old Tax Regime allows for various deductions and exemptions (like HRA, LTA, Sections 80C, 80D, etc.), but generally has higher tax rates. The New Tax Regime offers lower tax rates but disallows most common deductions and exemptions.
When you calculate your advance tax, you must first decide which regime is more beneficial for you for FY 2024-25 (AY 2025-26). This choice will determine the deductions you can claim and the tax slab rates applicable to your income. Your advance tax liability will change based on this decision. It's wise to calculate your tax under both regimes before deciding.
Advance Tax Payment Due Dates for FY 2024-25 (AY 2025-26)
Meeting the advance tax payment schedule is crucial. The Income Tax Department specifies advance tax due dates for different categories of taxpayers. Missing these advance tax installments can lead to interest penalties. Here are the due dates for Financial Year 2024-25 (Assessment Year 2025-26).
For all assessees (other than those covered under Section 44AD/44ADA of the Income Tax Act, 1961):
Due Date | Cumulative Percentage of Advance Tax to be Paid |
On or before June 15, 2024 | Not less than 15% of total advance tax |
On or before September 15, 2024 | Not less than 45% of total advance tax |
On or before December 15, 2024 | Not less than 75% of total advance tax |
On or before March 15, 2025 | 100% of total advance tax |
For assessees covered under the Presumptive Taxation Scheme (Section 44AD/44ADA):
Due Date | Cumulative Percentage of Advance Tax to be Paid |
On or before March 15, 2025 | 100% of total advance tax |
It's important to note these official dates. The advance tax last date for each installment must be respected to avoid consequences. Any tax paid by March 31st of the financial year is generally treated as advance tax. However, paying by the specific installment due dates helps avoid interest under Section 234C. These dates are for FY 2024-25 (AY 2025-26).
Understanding Challan 280 (ITNS 280) for Advance Tax Payment
Challan 280, also known as ITNS 280, is a crucial form for making various income tax payments to the government. The purpose of Challan 280 is to facilitate the payment of income tax, including advance tax, self-assessment tax, tax on regular assessment, surtax, and tax on distributed profits or income. This income tax challan 280 is essential because it ensures that your tax payment is correctly credited to your Permanent Account Number (PAN) and accounted for by the tax department.
You can use Challan 280 for both online and offline tax payments. When you pay tax using this challan, whether for advance tax or Self-Assessment Tax, it acts as a formal record of your payment. Knowing what is Challan 280 and using it correctly is a key part of fulfilling your tax duties.
How to Pay Advance Tax Online Using Challan 280: Step-by-Step
You can conveniently pay advance tax online using Challan 280 through the Income Tax Department's e-Pay Tax facility. This advance tax challan 280 online payment method is secure and provides an immediate receipt. Here’s how to fill challan 280 for advance tax and complete the income tax e-payment for advance tax. Previously, many used the NSDL advance tax payment system, but now it's streamlined through the main Income Tax e-Filing portal.
Pre-payment Checklist: Information you'll need handy:
Your PAN (Permanent Account Number)
The Assessment Year (AY) for which you are paying (e.g., 2025-26 for FY 2024-25)
Estimated tax amounts (Basic Tax, Surcharge, Cess if applicable)
Bank account details for Net Banking or Debit Card details.
Here's a step-by-step guide:
Visit the Income Tax e-Filing Portal: Go to the official website: incometax.gov.in.
Navigate to "e-Pay Tax": On the homepage, look for the "e-Pay Tax" option, usually found under 'Quick Links' or you can use the search bar. Click on it. You might be asked to enter your PAN and mobile number for OTP verification to proceed if you are not logged in.
Click on "New Payment": Once in the e-Pay Tax section, you will likely see an option for "New Payment" or similar. Click this.
Select "Income Tax" (Challan 280/ITNS 280): You'll be shown various tax payment categories. Choose "Income Tax" or specifically "Challan 280/ITNS 280." Click 'Proceed'.
Select Assessment Year (AY): Carefully choose the correct Assessment Year. For income earned in FY 2024-25, the AY is 2025-26.
Select Type of Payment (Minor Head): For advance tax, select "(100) Advance Tax" as the Type of Payment (Minor Head). Click 'Continue'.
Enter PAN and Other Details: The system may auto-populate some details if you are logged in or have verified PAN earlier. Otherwise, enter your PAN. You might also need to provide your name and address details. Ensure these are accurate.
Select Mode of Payment: Choose your preferred mode of payment. Options typically include Net Banking (select your bank from the list) or Debit Card/Payment Gateway.
Enter Tax Amount Details: Carefully enter the breakup of your tax payment: Basic Tax, Surcharge (if any), Health and Education Cess, and Total. Ensure the total matches your calculated advance tax installment.
Confirm Details and Make Payment: Review all the details entered on the preview challan page. If everything is correct, confirm and proceed to make the payment through your chosen bank's portal or payment gateway.
Download and Save the Challan Receipt: After successful payment, a challan receipt will be generated. This is a very important document. Download and save it. The receipt will contain the BSR (Basic Statistical Return) code of the bank branch, the tender date (date of deposit), the challan serial number, and the amount paid. These details are crucial for your records and for quoting when filing your Income Tax Return (ITR).
Details to Fill in Challan 280 for Advance Tax
When you fill Challan 280 for advance tax payment, accuracy is vital to ensure your payment is correctly accounted for. Here are the key challan 280 fields for advance tax:
Permanent Account Number (PAN): Enter your 10-digit PAN correctly. This is the most critical field.
Assessment Year (AY): Select the appropriate Assessment Year for which you are paying the advance tax. For income earned in Financial Year 2024-25, the Assessment Year is 2025-26.
Major Head: For income tax payments by individuals or entities other than companies, the Major Head is (0021) Income-tax (Other than Companies). For companies, it is (0020) Corporation Tax.
Minor Head (Type of Payment): Specifically for advance tax, you must select "(100) Advance Tax". Choosing the wrong minor head can lead to misclassification of your payment.
Tax Amounts Breakup: You need to provide the breakup of the total tax amount you are paying:
Income Tax (Basic Tax): The main tax component.
Surcharge: If applicable based on your income level.
Health and Education Cess: Calculated at 4% on the (Income Tax + Surcharge).
Interest/Penalty (if any): Generally, for advance tax installments paid on time, these fields would be zero.
Total: The sum of all the above amounts.
Mode of Payment: Indicate if you are paying via Net Banking or Debit Card (for online) or at a bank branch (for offline).
Address and Contact Details: Provide your current address, email, and mobile number.
Ensuring these details for challan 280 are correctly filled helps in the smooth processing of your tax payment.
Penalties for Non-Payment or Late Payment of Advance Tax (Sections 234B & 234C)
Failing to pay advance tax or paying it late can lead to interest penalties under the Income Tax Act. The two main sections that deal with this are Section 234B and Section 234C. These are statutory penalties, and it's important to understand them to avoid extra costs. The general rate for this interest on advance tax is 1% per month or part of a month.
Interest under Section 234B
Interest under Section 234B is levied for default in payment of advance tax. This applies if you have not paid any advance tax at all, or if the advance tax you paid by the end of the financial year (i.e., by March 31st) is less than 90% of your "assessed tax" (total tax liability minus TDS). The interest is 1% per month (or part of a month) on the shortfall (Assessed Tax minus Advance Tax Paid). This interest is calculated from April 1st of the Assessment Year until the date you pay the full tax or the date of determination of total income under regular assessment.
Simple Example for Section 234B: Suppose your total tax liability for FY 2024-25 (after TDS) is ₹1,00,000. You should have paid at least 90% (₹90,000) as advance tax by March 31, 2025.
If you paid only ₹70,000 as advance tax, the shortfall is ₹30,000 (₹1,00,000 - ₹70,000).
Interest under Section 234B would be 1% per month on ₹30,000 from April 1, 2025, until you pay the remaining tax. If you pay it, say, on July 10, 2025, interest for 4 months (April, May, June, July) would apply: ₹30,000 1% 4 = ₹1,200.
Interest under Section 234C
Interest under Section 234C is levied for deferment or shortfall in the payment of advance tax installments. If you don't pay the required percentage of advance tax by the due dates for each installment, you'll have to pay interest at 1% per month for a period of 3 months on the amount of shortfall for the first three installments. For the last installment (due March 15th), if the tax paid up to March 15th is less than the total advance tax due, interest at 1% is charged for 1 month on the shortfall.
Simple Example for Section 234C: Assume your total advance tax payable is ₹1,00,000.
1st Installment (June 15): Due: 15% (₹15,000). If you paid ₹10,000. Shortfall: ₹5,000. Interest: ₹5,000 1% 3 months = ₹150.
2nd Installment (September 15): Cumulative Due: 45% (₹45,000). Suppose you paid ₹20,000 by June 15 and now pay ₹10,000 more by Sep 15 (Total paid ₹30,000). Shortfall from 45%: ₹15,000. Interest: ₹15,000 1% 3 months = ₹450.
3rd Installment (December 15): Cumulative Due: 75% (₹75,000). Suppose total paid by Dec 15 is ₹60,000. Shortfall from 75%: ₹15,000. Interest: ₹15,000 1% 3 months = ₹450.
4th Installment (March 15): Cumulative Due: 100% (₹1,00,000). Suppose total paid by March 15 is ₹90,000. Shortfall: ₹10,000. Interest: ₹10,000 1% 1 month = ₹100. (This example simplifies the calculation which adjusts for previous payments).
Summary of Penalties:
Section | Reason for Interest | Interest Rate | Period |
234B | Advance tax paid is less than 90% of assessed tax. | 1% per month | From April 1st of AY until payment of tax/assessment. |
234C | Deferment/shortfall in paying advance tax installments. | 1% per month | 3 months for first 3 installments' shortfall, 1 month for last one. |
What Happens After Paying Advance Tax?
After you make your advance tax payment, there are a few important things to do. The first is to secure your challan receipt. This receipt is proof of your payment and contains vital information. The Challan Identification Number (CIN) is particularly important. The CIN consists of the BSR code of the bank where you paid the tax, the date of deposit (tender date), and the challan serial number. These details – BSR Code, Challan Serial Number, and amount – are required when you are filing your Income Tax Return (ITR).
You should also verify your payment status. You can usually do this by:
Checking your bank statement to see if the amount has been debited.
The challan receipt itself is confirmation.
You might also be able to check your challan status on the OLTAS portal (Challan Status Inquiry) using the CIN, although the Income Tax portal might now have its own integrated way to view payment history after logging in. Form 26AS (Annual Tax Statement) will also reflect these payments after a few days.
Keep all your advance tax challan receipts safely. When you file your ITR, you'll need to provide details of the advance tax paid to claim credit for it against your total tax liability. Correctly reporting your CIN number advance tax helps ensure your ITR is processed smoothly.
Common Mistakes to Avoid When Paying Advance Tax
Paying advance tax correctly is important. Here are some common mistakes advance tax payers should try to avoid:
Incorrect Assessment Year (AY) Selection: This is a very frequent error. Always double-check that you are selecting the correct AY. For income earned in FY 2024-25, the AY is 2025-26.
Wrong PAN: Entering an incorrect PAN or someone else's PAN will mean the tax credit goes to the wrong account. Verify your PAN carefully.
Choosing Incorrect 'Type of Payment' (Minor Head): Selecting 'Self-Assessment Tax (300)' instead of 'Advance Tax (100)' or vice-versa is a common mix-up. Ensure you pick '(100) Advance Tax'.
Errors in Tax Amount Calculation: Miscalculating your estimated income or the tax due can lead to underpayment (attracting interest) or overpayment (leading to refunds).
Missing Due Dates: Not adhering to the installment due dates can result in interest under Section 234C.
Calculation Errors in Breakup: Mistakes in bifurcating the total amount into Basic Tax, Surcharge, and Cess can cause issues.
Ignoring Other Income Sources: Salaried individuals sometimes forget to include income from other sources like rent, interest, or small capital gains, leading to a shortfall in advance tax.
Being mindful of these points can help you avoid advance tax payment mistakes and ensure compliance.
Rectifying Errors in Advance Tax Challan Payment
If you realize you've made a mistake in an advance tax challan payment after it's paid, the possibility of challan correction depends on the type of error. Minor corrections, like an incorrect Assessment Year or a wrong Major/Minor head, might be rectifiable. Some banks may allow certain corrections at their end if approached soon after the payment. Alternatively, you might need to approach your Assessing Officer (AO) with an application for rectification. The Income Tax Department has also introduced online challan correction facilities for certain types of errors on the portal.
However, if you made a mistake in challan 280 payment regarding the amount of tax paid (e.g., you paid less than intended), you generally cannot correct the amount in the same challan. In such cases, you would typically need to make an additional payment for the deficit amount using a new challan. It's not usually possible to get a refund for an overpayment through challan correction; that is typically handled by claiming a refund in your ITR.
For definitive guidance on how to rectify advance tax payment errors, it's best to refer to your bank or your Assessing Officer, as procedures can vary.
What if You Pay Excess Advance Tax?
Sometimes, your estimated income might be higher than your actual income, or you might have miscalculated, leading to excess advance tax paid. If you find that you have paid more advance tax than your actual tax liability for the year, don't worry. You can claim this excess amount as a refund.
To get your advance tax refund, you need to file your Income Tax Return (ITR) after the financial year ends. In your ITR, you will declare your total income, calculate your final tax liability, report the TDS deducted, and also report the advance tax (and self-assessment tax, if any) you have paid. If the total tax paid (TDS + advance tax + self-assessment tax) is more than your actual tax liability, the difference will be processed as a refund by the Income Tax Department.
Furthermore, if the excess tax paid is more than 10% of your total tax liability, you may also be eligible to receive interest on this refund from the government under Section 244A of the Income Tax Act. The interest is generally calculated at 0.5% per month from April 1st of the assessment year (or from the date of payment if made later) up to the date the refund is granted. You can learn more about how to claim an income tax refund through the proper channels.
Conclusion: Stay Compliant with Advance Tax Payments
Staying on top of your advance tax compliance is a smart move. Timely and accurate advance tax payment using Challan 280 throughout the financial year helps you manage your tax obligations smoothly. More importantly, it saves you from the burden of interest under Sections 234B and 234C and potential penalties. Understanding your liability, calculating it correctly, and paying it by the due dates are key aspects of good financial discipline.
The importance of advance tax cannot be overstated for individuals and businesses with significant income not covered by TDS. While the process might seem a bit detailed, following the guidelines ensures you meet your responsibilities. If you need assistance with your advance tax planning, calculation, or payment, remember that expert help is available. Taxbuddy can assist you in navigating these requirements. For any help with your tax needs, feel free to Contact Taxbuddy today.
FAQ
Q1: Can I pay advance tax after the due date?
Yes, you can pay advance tax after the due date, but if you miss an installment deadline or pay less than the required amount, interest under Section 234C might apply for the period of delay or shortfall. Any tax paid by March 31st is treated as advance tax, but it's best to meet installment deadlines.
Q2: What if I miss an advance tax installment?
If you miss an advance tax installment or pay less than the stipulated amount, interest under Section 234C at 1% per month for three months (or one month for the March installment shortfall) will be charged on the deficient amount.
Q3: Do salaried employees always have to pay advance tax?
Not always. Salaried employees usually have TDS deducted by their employer. However, if they have other income (like rental income, capital gains, interest) and their total tax liability (after TDS) for the year is ₹10,000 or more, they must pay advance tax.
Q4: How to pay advance tax for capital gains?
Advance tax on capital gains is paid like any other advance tax. You need to estimate your capital gains for the year. Then, include this in your total income calculation. If your overall tax liability (after TDS) is ₹10,000 or more, you pay advance tax through Challan 280 in installments. Since capital gains can be unpredictable, you can pay the tax on such gains in the subsequent installments after the gain arises.
Q5: Is advance tax applicable to NRIs?
Yes, advance tax provisions apply to Non-Resident Indians (NRIs) as well if their tax liability in India on income earned or accrued in India is ₹10,000 or more during the financial year, after considering TDS.
Q6: Can advance tax be paid offline?
Yes, advance tax can be paid offline. You need to fill out Challan 280 and submit it along with the payment (cash, cheque, or demand draft) at an authorized bank branch.
Q7: What is the Major Head and Minor Head for advance tax payment in Challan 280?
For individuals and non-company assessees, the Major Head is (0021) Income Tax (Other than Companies). For companies, it's (0020) Corporation Tax. The Minor Head for advance tax is (100) Advance Tax.
Q8: How many times can I pay advance tax in a year?
You should pay advance tax as per the prescribed installments (usually four for most taxpayers, one for those under presumptive schemes). However, if your estimated income changes during the year, you can pay more frequently or adjust amounts in subsequent installments.
Q9: What if my estimated income changes during the year?
If your estimated income increases or decreases significantly during the year, you should recalculate your advance tax liability. You can then adjust the amount payable in the remaining advance tax installments accordingly.
Q10: Where can I find my paid challan details for ITR filing?
You can find your paid challan details on the challan receipt (counterfoil) provided by the bank (offline payment) or the downloadable receipt (online payment). These details (BSR code, date, challan number, amount) will also reflect in your Form 26AS (Annual Tax Statement) and possibly in your logged-in section of the income tax portal under payment history.
Q11: Is there a penalty for not paying advance tax if my liability is less than ₹10,000?
No, the provisions for paying advance tax apply only if your estimated tax liability for the financial year is ₹10,000 or more. If it's less than ₹10,000, you don't need to pay advance tax, and thus no penalty applies for not paying it.
Q12: Can I pay all my advance tax in one go by March 15th if I am not under a presumptive scheme?
Yes, you can pay your entire advance tax liability by March 15th. However, if you haven't paid the earlier installments (due June 15, Sep 15, Dec 15) or paid less than required for them, interest under Section 234C for deferment of those installments might still be applicable, even if you pay 100% by March 15th.
Q13: What is CIN and why is it important?
CIN stands for Challan Identification Number. It's a unique 20-digit number (BSR code of bank + Date of Tender + Challan Serial No.) that is generated when you make a tax payment. It's crucial proof of payment and is required when filing your Income Tax Return to claim credit for the taxes paid.
Q14: How to check if my advance tax payment was successful?
Upon successful online payment, you'll get a downloadable challan receipt. Your bank account will also show the debit. Offline payments will have a stamped counterfoil from the bank. You can also verify payment in your Form 26AS after a few days or check the challan status on the OLTAS portal (if still primary) or the income tax portal's payment history section.
Q15: Does Taxbuddy help with advance tax calculation and payment?
Yes, Taxbuddy offers expert assistance for tax compliance, including advance tax calculations and guidance on the payment process. Our platform and experts can help you estimate your income, calculate your tax liability accurately considering the latest tax laws and your specific situation, and ensure timely compliance to avoid penalties. You can contact us for personalized assistance.
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