Advance tax second instalment payment due date: Know the penalty for missing the deadline
Advance tax is a proactive approach to fulfilling your income tax obligations, allowing you to pay your income tax in installments throughout the fiscal year rather than facing a hefty lump sum at the end. The first installment i.e. 15 per cent of the total amount should be paid by 15th June.
The payment of the second Instalment or 45 per cent of the tax should be made by the 15th of September. The third installment of the 75 per cent of the advance tax should be cleared by 15th December. The remaining amount or 100 per cent of the tax should be paid on or before 15th March.
Every person whose estimated tax liability for the year is Rs10,000 or more, shall pay his tax in advance. “However it is to be noted that the ₹10,000 or more limit is arrived after the deduction of all the tax credits of TDS/ TCS/ foreign tax credit/ Section 89 relief etc. from the original estimated tax liability," said Archit Gupta, Founder and CEO, Clear.
Citing an example, the Clear CEO explained that if a person's estimated tax liability of the year is ₹10,00,000 on his income from salary, interest income, dividend income, and TDS on salary is ₹9,00,000 and ₹50,000 is on earning from interest, dividend, etc., then his liability will be ₹50,000. In this case, advance tax needs to be paid by the person. When a taxpayer fails to pay their income tax prior to the due date, they would be liable to pay interest on the unpaid tax under sections 234B and 243C.
“Punctuality matters in taxation; missing the quarterly deadlines can lead to additional costs. As per sections 234B and 234C, a penalty interest of 1% per month or part thereof is applied for default in payment of advance tax," said Abhishek Soni, CEO and Co-founder Tax2win. “Interest u/s 234B
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