📢Advance Tax due date on 15 March, 2024. Hurry❗

[Tax with Ria]

Gentle Reminder to pay your advance tax on or before 15 March, 2024.

What is Advance Tax?
Advance tax is the income tax that is paid in advance instead of lump sum payment at year end. It is the tax that you pay as you earn. These payments have to be made in instalments as per due dates provided by the income tax department.

Advance tax liability arises if your net tax liability for the FY is more than ₹10000. Generally Advance Tax for any F.Y has to be paid in following instalments for individuals or corporate taxpayers-

15th June	15% of Advance tax
15th September	45% of Advance tax(-) advance tax already paid
15th December	75% of Advance tax(-) advance tax already paid
15th March	100% of Advance tax(-) advance tax already paid

The advance tax applies to all taxpayers, salaried, freelancers, and businesses.
1. To whom Advance Tax does not applies?
People aged 60 years or more, and do not run a business, are exempt from paying advance tax.

Salaried Individual whose TDS is deducted by employer and 90% of estimated tax liability is already deducted by way of TDS, are exempt from paying advance tax.
2. Who needs to pay on/before 15th March?
Taxpayers who have opted for the presumptive taxation scheme under section 44AD have to pay the whole amount of their advance tax in one instalment on or before 15 March. They also have the option to pay all of their tax dues by 31 March.

Independent professionals such as doctors, lawyers, architects, etc. come under the presumptive scheme under section 44ADA. They have to pay the whole of their advance tax liability in one instalment on or before 15 March. They can also pay the entire amount by 31 March.

3. If you do not pay/delay in Advance Tax?
Non payment of Advance Tax-
As per Section 234B, you must pay at least 90% of the total taxes as advance tax by 31st March. Failure to make advance tax payments will result in an interest @ 1% on the unpaid amount.
Delay in payment of advance tax will attract interest under 234C

Particulars	Rate of Interest	Period of Interest	Amount on which interest is calculated
If Advance Tax paid by 15th June is less than 15%	1% per month	3 months	15% of Amount* (-) tax paid before June 15
If Advance Tax paid by 15th September is less than 45%	1% per month	3 months	45% of Amount* (-) tax paid before September 15
If Advance Tax paid by 15th December is less than 75%	1% per month	3 months	75% of Amount* (-) tax paid before December 15
If Advance Tax paid by 15th March is less than 100%	1% per month	1 month	100% of Amount* (-) tax paid before March 15

So remember to pay your advance tax on time to avoid any interest payment during due date of return filing in July/ September.
You can pay your advance tax from "e-pay" tab in efiling portal and generate a challan from there.

Hope it helped you

 

[Hema Kulkarni]

Thank you for breaking it down. Does this advance tax apply to an IT consultant working with US clients?

 

[Tax with Ria]

Thank you for breaking it down. Does this advance tax apply to an IT consultant working with US clients?

If you're working as a freelancer, then you'll have to pay 100% of net tax liability as Advance Tax. However, if you're working under a employer employee relationship, i.e on salary basis and TDS is being deducted, then no need to pay advance tax.

 

[Hema Kulkarni]

If you're working as a freelancer, then you'll have to pay 100% of net tax liability as Advance Tax. However, if you're working under a employer employee relationship, i.e on salary basis and TDS is being deducted, then no need to pay advance tax.

Thank you for clarifying, I'm also trying to pursue Youtube/ Instagram on the side. Income from Youtube/ Instagram will come under Section 44ADA or Section 44 AD?

 

[A.Chatterjee]

I have started Stock market trading in mid 2023. No previous record of income. Never paid any income tax by myself. Got a message of Advance tax payment today. Can anyone suggest me what to do now? The link website is not working.

 

[Tax with Ria]

Thank you for clarifying, I'm also trying to pursue Youtube/ Instagram on the side. Income from Youtube/ Instagram will come under Section 44ADA or Section 44 AD?

If you're providing any technical knowledge or making videos on any notified professions (doctor, engineer, law, architecture, interior designer, CA/CMA/CS), then your income from youtube videos shall be taxed u/s 44ADA otherwise any other youtube videos revenue shall be taxed under 44AD.
Under Section 44AD of presumptive taxation, Youtuber with less than 2 Crore of Turnover are not required to maintain books of accounts and their profits are presumed to be 8% of their turnover. For availing additional benefit under this scheme, profits where income is credited digitally or through the bank will be considered as 6% as against 8% for cash receipts.

 

[Tax with Ria]

I have started Stock market trading in mid 2023. No previous record of income. Never paid any income tax by myself. Got a message of Advance tax payment today. Can anyone suggest me what to do now? The link website is not working.

I saw your SS, you need to first login into your e-filing portal. Open your 26AS
Under "pending actions" tab in e-filing portal, income tax notice or demand clarification might be there. Read that first and respond according to the 26AS and any capital gain or brokerage arised while doing intra day trading of shares.
In order to conversate more, you can DM me as confidentiality of your information is most important according to CA ethics.