It’s Wise To Pay 90% Of Advance Tax By March 31

Many taxpayers are not aware about the provisions of the Advance Tax and have to pay additional interest at the time of filing of their tax returns which can be saved - Abhishek Aneja, a Gurugram-based CA, tells Bizz Buzz

Mumbai: If your tax liability is over Rs10,000, and you couldn’t pay your advance tax until March 15, then there is no need to worry as you can still deposit at least 90 per cent of your advance tax by March 31. It will help you save on some interest under section 234B of Income-Tax (I-T) Act.

Advance tax has to be paid by taxpayers who have a total tax liability above Rs10,000 in a given financial year. However, salaried individuals whose employer deducts the correct amount of TDS from salary don’t need to pay advance tax.

Talking to Bizz Buzz, Abhishek Aneja, Chartered Accountant based in Gurugram and Author of Navigate Financial Wellness says: “Many taxpayers are not aware about the provisions of the Advance Tax and have to pay additional interest at the time of filing of their tax returns which can be saved.”

Advance Tax works on the principle of ‘Pay as You Earn’ and it helps the Government to collect taxes in a timely manner, he said.

According to Aneja, “you can still deposit at least 90 per cent of your advance tax by March 31 to save on some interest under section 234B of Income Tax Act.”

The stress is on the word ‘correct’, because experts say many salaried individuals struggle with huge interest under Section 234C and 234B (in some cases) due to non-payment of advance tax on time, and this may happen despite TDS being deducted by the employer.

Where income from capital gains is earned in November 2024, taxpayer shall be required to discharge the whole of the amount of tax payable in the remaining installments i.e. by December 15, 2024, and March 15, 2025, so as to not attract penal interest under section 234C of the Act.