Taxpayers will face a penalty if they don't pay advance taxes by the deadline of September 15.

Taxpayers must make the advance tax payment before the deadline of each quarter to avoid paying advance tax penalties.

As per Section 208 of the Income Tax Act, 1961, taxpayers must pay advance taxes if their liabilities from the previous year exceed Rs 10,000. The advance tax due date of Q2 was September 15 and taxpayers failing to meet the deadline will have to pay the advance tax penalty of 1% per month on the unpaid taxes. 

Highlights:

• Advance tax payment allows the taxpayers to pay liable taxes in instalments throughout the year.

• Taxpayers must make the advance tax payments before the due dates in each quarter.

• An advance tax penalty of 1% per month is imposed on defaulters by the income tax department.

What is the advance tax payment to be paid by taxpayers in India? 

Advance tax payment is an opportunity for taxpayers to reduce their tax burden by paying their liable taxes in instalments. It is also termed the “pay as you earn” tax. The tax payments must be made before the advance tax due dates each quarter. The following category of taxpayers shall pay advance taxes if their tax liability for the previous year exceeds Rs 10,000:

1. Salaried Employees

2. Freelance Professionals

3. Businesses

4. Independent Professionals (Doctors, Lawyers, Architects)

Senior citizens are exempted from making advance tax payments if they are not running any form of business.

Also Read: Have you made Advance Tax Payments yet? 

What is the advance tax due date for the taxpayers?

The due dates for paying advance taxes are determined by the income tax department. Taxpayers must make the tax payments before the advance tax due dates to avoid the advance tax penalty. The deadlines for the quarters are:

1. Q1 (15^th June): 15% of advance tax must be paid before the deadline.

2. Q2 (15^th September): { (45% of advance tax) – (tax paid already)}

3. Q3 (15^th December): { (75% of advance tax) – (tax paid already)}

4. Q4 (15^th March): { (100% of advance tax) – (tax paid already)}

Also Read: What are advance tax payments and how can a taxpayer pay online?

What are the implications of not making the advance tax payments before the due date?

The implication for not making advance tax payments before the advance tax due date is a penalty of 1% on the unpaid taxes. Taxpayers are liable to pay the advance tax penalty before the due dates each quarter and make at least 90% of the total advance tax payments before the 31^st of March.

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Conclusion

Advance tax payments can ease the burden on the taxpayers, as they can pay the liable taxes in instalments rather than at once. Moreover, taxpayers can avoid paying the advance tax penalty by making the advance tax payments before the deadline each quarter and get mental peace.