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How to Pay Advance Tax Online? Research Team | Posted On Wednesday, May 08,2019, 03:51 PM

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How to Pay Advance Tax Online?



What is Advance Tax Payment?

Advance tax refers to paying a part of your tax liability before the financial year is over. Advance tax is also known as ‘pay-as-you-earn’ scheme. It is paid by those whose tax liability exceeds the threshold limit of Rs 10,000 in a financial year.

Advance tax helps the government receive a constant flow of revenue throughout the year, instead of receiving all taxes at the end of the year. Advance tax is applicable by people who have sources of income other than salary like rent, capital gains from house/property, gains on shares, and interest from fixed deposits and so on.

Advance Tax in India:

Any resident of India, whose tax liability exceeds Rs 10,000 in a financial year after TDS, must pay advance tax. Under the advance tax system, the tax liability of a person is paid in installments within the same financial year. If the total tax paid exceeds the estimated tax liability, then the person can file income tax returns and the excess amount is refunded by the government.

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How to pay advance tax online?

Follow the steps given below to pay advance tax online:

  • Visit the official website of TIN tax e-payment.
  • Click on the “Challan No/ITNS 280” under the “non TDS/ TCS” option and click on ‘proceed’.
  • Enter the ‘Captcha code’ displayed on the screen and Click on ‘proceed’.
  • The name on your PAN card is displayed on the screen.
  • Click on ‘submit’.
  • You will be directed to the net banking page.
  • Login to your personal net banking account.
  • Enter the total tax in the field basic tax.
  • Click on the ‘submit/ make payment’ button.
  • Once the payment is successfully completed, you will get a receipt.
  • Save a copy or take a screenshot.

SEE ALSO: Importance of Paying Advance Tax

Who is Eligible to pay Advance Tax?

Advance tax means income tax that is paid in advance, instead of lump sum payment at the end of the year. Advance tax is applicable if tax liability exceeds Rs 10,000 after deducting TDS. In case of salaried individuals, the advance tax must be paid online for any additional income of the person like capital gains from shares, income from rent, interest income on fixed deposits and so on.

These payments have to be made in installments as per due dates provided by the income tax department. Therefore, advance tax is applicable to salaried individuals who have other sources of earning other than salary:

Salaried, freelancers and businesses: For this category, advance tax is applicable if the total tax liability exceeds Rs 10,000 in a financial year. Advance tax is applicable on all sorts of professionals like salaried, freelancers and businessmen. However, senior citizens above 60 years of age are exempt from advance tax.

Income for Businesses: Individuals who have chosen the presumptive taxation scheme must submit the full amount of advance tax in a single installment on or before 15th March. The date can be extended up to 31st March.

The presumptive taxation scheme under Section 44AE was introduced by the Income Tax Act, to reduce the burden on small taxpayers.

Income for Professionals: In case of professionals like doctors, lawyers, engineers who choose the presumptive tax scheme under section 44ADA, must make a lump sum payment of advance tax in a single installment on or before 15th March.

Penalty and interest: A penalty is imposed for not paying advance tax on scheduled time as mentioned by the government. The penalty is paid along with taxes due before filing income tax returns. The penalty is charged according to Section 234B of Income Tax Act (Interest for non-payment of Advance Tax): If 90% of the tax due is not paid by the end of the financial year, interest @ 1% is charged. Section 234C of the Income Tax Act (Interest for deferred payment of advance tax) states that if the tax is not paid according to the scheduled time, interest at 1% is charged per month.

SEE ALSO: All You Must Know About Tax Planning

 Due Dates for payment of Advance Tax:

An individual must pay a percentage of the total advance tax on or before the following dates:

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