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’ tax, requires individuals and businesses to pay their estimated income tax liability in instalments throughout the year instead of a lump sum at year-end. This system ensures the government receives a steady flow of revenue and taxpayers can manage their finances better.
Who Needs to Pay Advance Tax?
You are liable to pay advance tax if your estimated tax liability exceeds ₹10,000 for the financial year. The following categories must pay advance tax:
✅ Salaried Individuals with additional income (e.g., fixed deposits, capital gains, or rental income)
✅ Freelancers earning above the specified limit
✅ Business Owners and Professionals
✅ Companies regardless of profit or loss
Exemptions from Advance Tax Payment:
- Senior citizens aged 60 years or above who do not have business income are exempt from advance tax.
Advance Tax Payment Schedule for FY 2024-25
The advance tax payment deadlines are divided into four instalments. Here’s the detailed schedule:
| Due Date | Advance Tax Payable |
| 15th June 2024 | 15% of total tax liability |
| 15th September 2024 | 45% of total tax liability (cumulative) |
| 15th December 2024 | 75% of total tax liability (cumulative) |
| 15th March 2025 | 100% of total tax liability (final instalment) |
https://eportal.incometax.gov.in/iec/foservices/#/e-pay-tax-prelogin/user-details
How to Calculate Advance Tax?
Follow these steps to calculate your advance tax liability:
- Estimate Your Total Income: Include salary, business income, interest income, capital gains, rental income, etc.
- Deduct Allowable Deductions: Claim deductions under Section 80C, 80D, and other applicable sections.
- Calculate Tax Liability: Apply the appropriate income tax slab rates for your income category.
- Subtract TDS (Tax Deducted at Source): Deduct TDS already paid from your total tax liability.
- Compute Advance Tax Instalments: Split the remaining tax liability according to the due dates mentioned above.
How to Pay Advance Tax Online?
Advance tax can be paid easily through the government’s e-filing portal. Follow these steps:
- Visit the e-Filing portal.
- Log in to your account using your PAN details.
- Navigate to the “e-Pay Tax” section.
- Select the appropriate Challan No./ITNS 280 for advance tax payment.
- Enter your payment details, select the correct assessment year (AY 2025-26 for FY 2024-25), and complete the payment using net banking or debit card.
- Save the challan receipt for future reference.
Penalties for Late Payment of Advance Tax
Failure to pay advance tax on time can lead to interest penalties under the Income Tax Act:
🔸 Section 234B: Imposes 1% interest per month for failing to pay 90% or more of your total tax liability before 31st March.
🔸 Section 234C: Imposes 1% interest per month for delayed instalment payments.
Example of Penalty Calculation:
Suppose your total tax liability is ₹1,00,000, and you failed to pay the required 75% (₹75,000) by 15th December 2024. If you paid this amount on 15th February 2025, you would incur:
- Interest for 2 months under Section 234C = ₹75,000 × 1% × 2 = ₹1,500
Benefits of Paying Advance Tax on Time
✅ Avoid penalties and interest charges
✅ Manage cash flow effectively by spreading tax payments throughout the year
✅ Reduce the financial burden at year-end
✅ Stay compliant with Income Tax rules
Conclusion
Advance tax is a vital part of your financial planning and ensures you remain compliant with income tax laws. By understanding the due dates, calculation methods, and payment process, you can avoid unnecessary penalties and manage your tax obligations effectively. Mark your calendar for the 15th March 2025 deadline to pay the final instalment and stay tax-compliant!
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