How to Make Advance Tax Payment: Online & Offline

Advance tax payment is done by individuals and businesses in instalments quarterly if their tax liability surpasses ₹10,000, rather than waiting until the end of the year.

The advance tax last date is on or before the 15th of June, September, December, and March. Failing to pay advance tax can result in a penalty, so taxpayers must make sure to stay up to date with the advance tax payments.

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What is Advance Tax Payment?

Advance tax payment includes paying a portion of your annual taxes in advance, before the end of a fiscal year. It is applicable to taxpayers with income additional to or other than salary, such as investments, capital gains, business, house property, etc. Taxpayers who have a tax liability of equal to or more than ₹10,000 are eligible to make advance tax deposits.

Advance tax payment is made in three or four instalments, depending on your source of income. You can make advance tax payments online through Challan 280. In case you fail to pay the advance tax on time or pay less tax, you’ll have to pay advance tax interest of 1% each month for the delay period.

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Who is Liable to Make Advance Tax Payment?

Below are the eligibility criteria for taxpayers who must pay advance tax in India. Failing to do so can result in a penalty, so check below if you are liable to make advance tax payment in FY 2023-24.

Salaried, Self-Employed and Companies

Advance tax for salaried employees, self-employed individuals and companies is applicable if their total tax liability in a financial year is ₹10,000 or more.

Senior Citizens

Senior citizens aged 60 years and above, who have income only from business are liable to pay advance tax.

Presumptive Income for Businesses and Professionals

Taxpayers with income from businesses who have opted for the presumptive taxation scheme u/s 44AD and independent professionals such as doctors, lawyers, architects, etc., under the presumptive scheme u/s 44ADA must pay advance tax in one instalment only.

The advance tax due date for them is 15th March. They also have the option to make advance tax payment online by 31st March.

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Who is Exempted from Paying Advance Tax Instalment?

Certain individuals are exempted from paying advance tax instalments in India. Check below if you qualify for advance tax payment or not:

Senior citizens aged 60 years and above, who don’t have income from business of any kind are exempted from making advance tax payments.
Advance tax for salaried employees who fall under the TDS scheme is also exempted. Also, a taxpayer is exempted if their TDS deducted is more than the tax payable for a fiscal year. However, they must pay advance tax on capital gains, interest, rent, and other non-salary sources.
Businesses who have chosen the Presumptive Schemes u/s 44AD and whose business income is approximately 8% of the turnover need not pay advance tax.

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How to Make Advance Tax Payment Online?

Follow the given steps to make advance tax payment India online:

Step 1: Visit the income tax e-filing official website and select the tab E-Pay Taxes

Step 2: Select the relevant challan, i.e., ITNS 280.

Step 3: Now enter your PAN and other mandatory details like address, bank details, etc. Select code 100 under “Type of Payment’ and select the correct assessment year. Also select the accounting head under which the payment is made.

Step 4: On submission of the given data, a confirmation screen will be displayed. After verifying the PAN/TAN details the website will auto-populate the name of the taxpayer and essential details.

Step 5: On confirmation of the data, the taxpayer will be directed to the external link of the netbanking site for the payment.

Step 6: Taxpayer can now proceed to the payment gateway and follow the payment instructions to complete the transaction after a validated login.

Step 7: On successful payment of the challan, a counterfoil will be displayed containing CIN, payment details and bank name through which the payment has been made. This counterfoil needs to be saved as a proof of payment for future references.

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How to Make Advance Tax Payment Offline?

If you are not comfortable with making advance tax payment online, you can also make advance tax payment in India at certain bank branches authorised by the IT department using the advance tax challan 280. Payment has to be made within 15 days of generation of the CRN or 31st March of the current financial year, whichever is earlier.

You need to carefully fill in the relevant sections and then make advance tax payment using cash, net banking, RTGS, demand draft or cheque. Cash transactions are however allowed only up to ₹10,000 per CRN. A mandate form is to be submitted to the bank in case of payment via net banking facility.

The eligible banks to make advance tax payment offline include:

ICICI bank
Syndicate bank
State Bank of India
Reserve Bank of India
HDFC Bank
Axis Bank
Punjab National Bank
Other authorised banks

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Advance Tax Payment Due Dates for FY 2023-24

Advance Tax Due Dates for Individuals and Companies

Advance Tax Last Date	Instalments	Advance Tax to Pay
On or before 15th June 2023	First instalment	15% of tax liability
On or before 15th September 2023	Second instalment	45% of tax liability
On or before 15th December 2023	Third instalment	75% of tax liability
On or before 15th March 2024	Fourth instalment	100% of tax liability

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Advance Tax Due Dates for Self-Employed and Business Entities

Advance Tax Last Date	Instalments	Advance Tax to Pay
On or before 15th September 2023	First instalment	30% of tax liability
On or before 15th December 2023	Second instalment	60% of tax liability
On or before 15th March 2024	Third instalment	100% of tax liability

Advance Tax Due Dates Under Presumptive Taxation Scheme u/s 44AD and 44ADA

Advance Tax Last Date	Advance Tax to Pay
On or before 15th March 2024	100% of tax liability

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What is the Penalty on Delayed Advance Tax Payment?

In India, eligible individual taxpayers and business entities are required to pay advance tax in instalments in a specified manner. Failing to pay the advance tax or making delayed advance tax payments can attract penalties under Sections 234B and 234C of the Income Tax Act.

Section 234B

Advance tax penalty u/s 234B applies if an individual's advance tax payment by the end of the financial year is less than 90% of the total tax liability. The advance tax interest is levied at 1% per month or part of the month, starting from the first day after the advance tax due date.

Section 234C

Advance tax penalty u/s 234C applies if the taxpayer fails to pay the advance tax instalments on or before the advance tax due dates. Any tax paid till 31st march will be treated as advance tax. The penalty is calculated based on the percentage of the tax amount that should have been paid before the due dates, if this amount differs from the actual paid amount. The advance tax interest is levied at 1% per month or part of the month for this difference amount of each instalment.

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Advance Tax Refund on Excess Advance Tax Payment

Sometimes a taxpayer can make more advance tax payments than mandated limits; in such a case the taxpayer can file for a refund from the IT department u/s Sections 237 to 245.

If your balance of advance tax payment under Form 26AS is more than your tax liability under the filed ITR, the assessment officer may approve your tax refund after you submit Form 30. You can file a claim within one year of the last assessment year.

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Benefits of Paying Advance Tax in India

Here’s why it is mandatory to pay tax in advance in India:

By paying advance tax instalments in each quarter, your burden of paying tax at the last moment is reduced.
It reduces the chance of taxpayers failing or forgetting to pay their taxes at the last minute.
Making advance tax payments within the due dates also helps in mitigating stress that accumulates while calculating the entire tax and paying it at the end of fiscal year.
Government also benefits from advance tax payments in India as it receives interest on the tax collected and can raise government funds.

Important Points About Advance Tax in India

Here are some points to remember about advance tax and self-assessment tax:

You can make advance tax payments online or offline.
Challan 280 is used for making advance tax payments.
Eligible taxpayers can avail themselves of deductions like Section 80C while making advance tax payments.
Salaried employees earning significant income from other sources like real estate, stocks, and investments are also required to pay advance tax.
Senior citizens are exempted from advance tax payment, except for income from business or profession that qualifies as an investment.
NRIs also must pay advance tax on their income in India if their tax liability is exceeding ₹10,000.
Self-assessment tax applicable to specific income and professions is also considered a form of advance tax.
If the March 15 deadline for advance tax is missed, taxpayers still have the option to pay by March 31 and it will be considered as advance tax. This is also applicable for taxpayers filing under the Presumptive Tax Scheme.

FAQs on Advance Tax Payment

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Does an NRI have to pay advance tax?

A Non-resident Indian (NRI) having income sources in India, which exceeds ₹10,000 is liable for advance tax payment.

Can I make ITR advance tax payment online?

Yes, you can pay online advance tax in India by visiting the e-payment facility on the official website of the Income Tax Department. Alternatively, you can also visit any eligible bank branches to make the advance tax payment offline.

Where to check the tax paid while filing ITR advance tax?

When filing ITR, enter the amount of Advance Tax alongside TDS in the Prepaid Taxes section of the ITR form.

What if I don’t make an advance tax payment?

Advance tax interest of 1% per month or part of the month will be levied as penalty charges u/s 234B and 234C on eligible taxpayers if they fail to pay advance tax instalments on due date.

What happens if I don't have any income during a particular quarter? Do I still need to pay advance tax?

If you have no income or your income is below the tax liability of ₹10,000, you are not obligated to pay advance tax for that quarter. However, if you later earn income exceeding this liability, you must make advance tax payment online for the subsequent quarters.

Is it possible to modify the advance tax instalments if my income changes during a financial year?

Yes, you can increase or decrease the upcoming advance tax instalments in case you expect an increase or decrease in income. However, interest u/s234B and 234C will be levied if the payment for the quarter falls short of the tax liability.

Can I request a refund if I have paid excess advance tax?

You can claim a refund while filing your ITR for advance tax. The excess amount will be refunded to you after verification and processing your return.

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