Advance tax: Payment Guide for FY 2024-25

Advance Tax Payment Guide for FY 2024-25 Advance Tax Payment Guide for FY 2024-25 Advance tax is a crucial compliance requirement for taxpayers whose total tax liability exceeds ₹10,000 in a financial year. Timely payment is essential to avoid penalties and ensure smooth financial planning. This guide will help you understand the due dates, calculation method, and other important aspects of advance tax for FY 2024-25. What is Advance Tax ? Advance tax , also known as ‘pay-as-you-earn ... Advance tax , popularly known as 'pay-as-you-earn', is the practice of making periodic payments toward an estimated income tax liability. It tends to help individual taxpayers, including freelancers and salaried employees, and businesses to deal with their respective tax liability in a more effective manner. This system is mandatory for taxpayers whose estimated tax liability is equal to or exceeds INR 10,000 during the financial year.This article will walk you through the basics of advance tax , Advance tax ensures that taxes are collected in installments rather than at year-end, reducing the burden on taxpayers and helping the government maintain steady revenue. By knowing the due dates, calculating correctly, and paying on time, individuals and businesses can avoid penalties and stay compliant with the Income Tax Act. Penalty for Non-Payment of Advance Tax Failure to pay advance tax results in interest penalties under Sections 234B and 234C of the Income Tax Act: Section 234B: Interest at 1% per month if at least 90% of total tax liability is not paid before the financial year ends. Section 234C: Interest at 1% per month if advance tax is not paid as per the specified installment schedule. Conclusion Advance tax is a crucial compliance requirement for individuals and businesses with taxable income ...