1. Meaning: Income Tax needs to be paid in advance during the financial year instead of lump sum payment at year-end. This is known as pay tax as you earn.

2. Applicability: if total tax payable (on estimated total income) for the financial year is ≥ INR 10,000

3. The amount payable and Due Date:

Due Date & Advance Tax Payable (cumulative):

(a) On or before 15th June – 15% of the estimated total tax liability for that FY

(b) On or before 15th September – 45% of the estimated total tax liability for that FY

(c) On or before 15th December – 75% of estimated total tax liability for that FY

(d) On or before 15th March 100% of total tax liability for that FY

4. Consequences of non-compliance (no payment/ short payment):

(a) Assessee (the company) deemed as ‘Assessee in default’ and recovery proceedings can be initiated.

(b) Interest u/s 234B: if payment of advance tax by Assessee (the company) is less than 90% of the total tax liability, then it will be liable for interest @ 1% p.m. or part of the month from 1st April till the date of payment of tax.

(c) Interest u/s 234C: if the advance tax paid in any instalment(s) is less than the prescribed percentage of instalment amount, interest is levied @ 1% p.m. for the period of default.

This article is for information only and written as per the provision given under income tax law and finance act 2021. For any other information please contact on mail [email protected] and WhatsApp 8879882025.

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Location: Kalyan, Maharashtra, IN
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I am a Chartered Accountant. You can reach out to me on 8879882025. View Full Profile

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