• Notification Date: 14-12-2024
• Notification No: N/A

Advance Tax Payment Deadline: What to Know

The deadline for the third installment of advance tax payments for the financial year 2024-25 is advancing in a rapid manner. It is crucial for the taxpayers to submit 75% of their approximate advance tax liability within December 15, 2024. Although since this date falls on a Sunday, the payments can still be made until Monday, December 16, 2024 without any kind of penalties.

Advance tax, which is also known as "pay as you earn" tax, is a prepayment of income tax on income that is earned during the financial year. Individuals, businesses, and self-employed individuals whose total liability of tax exceeds Rs 10,000 are required to pay advance tax.

For salaried individuals, the employers commonly deduct tax at source, but income from other sources, which includes interest, capital gains, and freelancing income, is not covered. This additional income needs to be accounted for when calculating the advance tax liability.

Advance tax payments are made in four installments throughout the year:

• June 15: Pay 15% of the estimated tax liability.
• September 15: Pay 45% (minus any previous payments).
• December 15: Pay 75% (minus any previous payments).
• March 15: Pay the remaining 100%.

Individuals who are self-employed under the speculative scheme of taxation can make a single payment by March 15, 2025 in order to help small businesses proactively manage their tax liabilities.

It is necessary to keep track of these deadlines in order to avoid penalties or compliance issues. Furthermore, while December 15 is the official deadline, payments can still be made by December 16 without facing penalties due to the weekend.

Stay updated and guarantee timely settlement of advance tax in order to keep finances well-organized for the year ahead.