What is an advance tax? How to pay advance tax online?

Advance tax is the tax calculated based on the year's estimated income. An individual is suggested to pay advance taxes only when his/her total tax liability increases by Rs. 10,000 in a fiscal year. This tax is mainly for self-employed people and NRIs whose income is more than Rs. 10,000 in India.

pay advance tax payments online

Advance tax is an important tax payment and should not be ignored. It is important to calculate your advance tax correctly and pay it on or before the due dates to avoid any penalties. Read more to learn about the process of paying advance tax.

Also read: What is advance tax?

What is the advance tax? How can one pay it online? 

Advance tax is a form of tax payment that is made prior to the final filing of the tax returns. It is usually paid in four instalments throughout the year, with the first instalment due by June 15 and the last by March 15. This allows taxpayers to pay tax in advance and helps the government with better tax collection.

An individual must pay advance tax if they receive money from sources other than their salary. This holds true for things such as rent, share capital appreciation, fixed deposits, lottery prizes, etc. You can pay for it online or by using certain banks. Advance tax is also referred to as the "Pay as you earn" system. If one’s tax liability exceeds Rs. 10,000 in a fiscal year, the tax is due. In the same year that the revenue was received, the tax is due.

Who is accountable for paying advance tax?

Self-employed individuals like entrepreneurs, professionals, freelancers, etc. are heavily affected by advance tax. NRIs who earn more than Rs 10,000 in India are required to pay advance tax.

Paying advance tax online is a simple and convenient way to do so. Here are the steps to pay advance tax online:

Step 1: Log in to the URL and choose the challan no. ITNS 280.

Step 2: Choose "Income Tax" under "Tax Applicable" (0021).

  • Choose Advance Tax Payment (100) as the mode of payment.
  • Settle on the form of payment as well as the bank that the payment must be made through.
  • Insert your PAN number.
  • Pick an assessment year (be careful here and confirm your choice).
  • Specify your contact information.
  • Type the verification code and select the next button.

Step 3: Double-check the data submitted, then press the "Submit to the bank" option.

Step 4: To complete the payment, sign into your net banking account.

Step-5: Enter the overall tax amount in the Basic Tax section and click on the Make Payment option.

Step 6: After completing the quick tax payment process, you receive a challan cover sheet with significant information. Feel free to keep it secure for future usage.

Calculating advance tax online: Calculating advance tax online is simple, as there are several websites that offer online tax calculators. Here are the steps to calculate advance tax online:

Step 1: Visit a website or app that offers online tax calculators.

Step 2: Enter your income details, such as salary, business income, capital gains, etc.

Step 3: Enter your deductions, such as HRA, LTA, medical insurance, etc.

Step 4: Enter your tax-saving investments, such as PPF, ELSS, etc.

Step 5: Enter the tax slab applicable to your income.

Step 6: The calculator will then estimate the amount of advance tax you must pay.

Step 7: Use the estimate to determine the amount you need to pay for each advance tax installment.

You can also use the Income Tax Department’s website to calculate advance tax. All you need to do is enter your income details, tax deductions, and tax-saving investments to get an estimate of the advance tax you need to pay. Once you have calculated your advance tax, you need to pay it on or before the due dates.

Also read: The Pink tax!

Final words 

For both taxpayers and the government, advance tax is an advantageous type of income tax. It permits the government to project its tax revenues while assisting people more precisely in spreading out their tax liability over the course of a year. Taxpayers can take advantage of this taxation system as long as they make sure to pay their bills on time.


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