As the current fiscal year comes to a close in March, it is also time for taxpayers to be mindful of their tax-related deadlines. March 15, 2025 is the last date for individuals to submit their advance tax with the income tax authorities for the 2024-25 fiscal year. So if you haven’t made the tax payments, you should hurry and submit your advance tax liabilites before end of day today to avoid any penalties.
However, it is important to understand what advance tax is and who is liable to pay the tax. Income tax rules require taxpayers to submit advance tax if their overall tax liability for the financial year exceeds Rs 10,000. This tax, referred to as ‘earn and pay tax’ system needs taxpayers to evaluate their dues and submit their tax payments in time to avoid any late fees.
While advance tax is typically associated with high-earning professionals, business magnates, and celebrities, it also applies to anyone whose total tax liability for the financial year exceeds Rs 10,000.
Understanding Advance Tax Calculation
To ensure accurate payment, follow these key steps and calculate your accurate advance tax liability.
Estimate Your Total Income: Account for all income sources, including salary, business profits, professional earnings, capital gains, rental income, interest, and any other earnings.
Apply Eligible Deductions: Utilise deductions available under the Income Tax Act, such as those under Sections 80C, 80D, and others, depending on whether you opt for the old or new tax regime.
Compute Tax Liability: Based on your taxable income, determine the tax amount using the applicable slab rates.
Deduct TDS/TCS: Subtract any Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) that has already been deducted from your earnings.
After making all these calculations, if your net tax liability exceeds Rs 10,000, advance tax must be paid.
The payment schedule for advance tax is divided into four installments.
- 15 per cent by June 15
- 45 per cent by September 15
- 75 per cent by December 15
- 100 per cent by March 15
Also Read : Bank Holiday For March 15, 2025: Check Here If Banks Are Open Or Closed In Your City Today
Steps To Pay Advance Tax
- Visit the Income Tax Department’s e-filing portal.
- Click on the ‘e-Pay Tax’ option under ‘Quick Links.’
- Enter your PAN and mobile number, then verify with the OTP received.
- Choose the correct tax category under ‘Income Tax.’
- Select the payment type and enter the necessary tax amount.
- Pick a preferred payment method (Net Banking, Debit/Credit Card, UPI).
- Verify challan details and proceed with the payment.
- Save the tax receipt for future reference.
Timely payment of advance tax not only helps ease the financial stress for individuals and avoid penalties, it also aids in improving the fiscal planning for the upcoming year and make sound economic decisions.
