How to make Advance Tax Payment

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Divya Singhvi

Advance Tax
Due date
Tax Payments
Last updated on November 21st, 2023

Tax return filing is an annual ritual but tax planning is something that is done throughout the year to better manage the taxes and save some too. Advance tax payment is one such tax planning that can better manage tax payments. Advance tax involves making tax payments in instalments to avoid the lumpsum outflow of cash which can easily disrupt the financial budget.

What is Advance Tax?

Advance tax is applicable if the tax liability, after deducting prepaid taxes like TDS, and relief, exceeds INR 10,000 in a financial year. It should be paid in the year in which the income is earned which is why Advance tax is also called a ‘pay-as-you-earn’ tax. Advance tax payments shall be done at quarterly intervals on the 15th of the last month of each quarter.

What are the methods for advance tax payment?

There are 2 methods to pay advance tax.

1) Online via IT Portal

2) Offline via Bank Branch

1. Steps for Advance Tax Payment online via IT portal

Below are the steps to make online payment via IT portal:

  1. Visit the e-filing portal
  2. Now navigate to e-pay tax
  3. Enter PAN/TAN and mobile number and verify using OTP
  4. Now select the Income tax category
  5. Add the relevant Assessment year & select advance tax payment under minor head 100 as the type of payment
  6. Further, add tax break-up details
  7. Select the payment mode > continue > pay now
  8. Select I agree to the terms and conditions and click on Submit to the bank
  9. Complete the tax payment on the bank’s page.
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2. Steps for payment of Advance Tax Offline

  1. Visit the bank branch and ask for the applicable tax payment challan form-Challan 280 (in this case).
  2. Fill in the details as required in the form. The details asked in the form are the same as required in the online form.
  3. Go to the relevant bank’s counter and submit the filled-in Challan 280 form along with the money. Taxpayers can pay the taxes either in cash (max INR 10,000) or by cheque.
  4. The bank official will give a receipt by tearing off a portion of the challan, filling in the details of payment, and stamping it.
Payment can be done through Netbanking, Credit card, Debit card, UPI, Pay at bank counter, RTGS/NEFT, or payment gateway.
Payment can be done through Netbanking, Credit card, Debit card, UPI, Pay at bank counter, RTGS/NEFT, or payment gateway.

Once the payment is completed, either online or offline method, keep the receipts safely as proof of payment. The Annual Information Statement (AIS) generated on the IT Portal will reflect the tax paid under the section “B3- Information relating to payment of taxes“.


What should be done if the challan receipt for tax payment is not saved?

A taxpayer can log in to the IT Portal, and navigate to the e-file tab> e-Pay Tax> Payment History.
The taxpayer can also refer to AIS which contains the details of taxes paid.

What if the bank does not have an online payment facility or is not an authorized bank for E-Tax?

In case the bank does not have an online payment facility or is not an authorized bank then the taxpayer can make a payment of tax by visiting an authorized bank. Hence, it is not mandatory to hold a bank account with an authorized bank.

Does a taxpayer need to file a return while making an Advance Tax Payment?

No, a taxpayer need not file any return while making an advance tax payment, only tax payment has to be made on the IT Portal.

Is NRI liable to pay advance tax?

Yes, if income in India exceeds INR 10,000 they are liable to pay advance tax.

Got Questions? Ask Away!

  1. Hey @Shweta_Saini

    Advance tax is a ‘Pay as you earn’ tax, so it is required to be paid during the financial year in four different instalments in case your Taxable Liability is more than INR 10,000 for the financial year which stands true for you.

    The due dates for advance tax installments are:

    • 15th June - 15% of the tax liability
    • 15th Sept - 45% of the tax liability
    • 15th Dec - 75% of the tax liability
    • 15th March - 100% of the tax liability

    If you are eligible to pay advanced tax but have not paid advance tax, the penalty will be applicable u/s 234B and 234C.

    Let us know if you have any further questions!

  2. Hi Team, I had assumed that I will be able to pay advanced tax before March because I thought I could go for presumptive tax filing. But now it looks like I cannot opt for a presumptive taxation scheme. So does it mean that I did not pay the advanced quarterly tax that I was supposed to pay?

    If yes, what is the penalty in every case or are there some exceptions to avoid this interest penalty?

    Thanks in advance!

  3. Hey @riya_gupta

    You will be charged an interest penalty under section 234C for the delay/non-payment of advance tax during the year @1% per month on the shortfall amount. Additionally, under Section 234B a penalty interest is imposed on the taxpayers in case the advance tax payment is less than 90% of assessed tax liability during the year.

    You can avoid interest u/s 234B by paying at least 90% of your assessed tax liability by March 15, 2021.

    Hope this helps!

  4. Hey @TeamQuicko

    I have LTCG of more than 7 lakhs from the equity for this year. Is there a way to reduce my tax liability? Also, do I have to pay the tax in advance? If I fail to do so, what will be the penalty/interest percentage I have to pay during my tax filing in 2020?

  5. Hey @ViraajAhuja47, you can set off against non-speculative business loss like F&O for the current year. Long-term capital losses for the previous as well as the current year. Yes, you are required to pay advance tax in case your tax liability is more than INR 10,000 for the FY. The penalties for non-payment of advance tax are:

    Non-payment of Advance Tax u/s 234B 3: Interest at 1% in case the taxpayer fails to pay 90% of the tax liability in the same FY
    Delay in Payment of Advance Tax u/s 234C 1: if there is a delay in tax payment than interest @ 1% is applicable.

  6. Hello @S_P

    Tax paid on or before 31/03/2021 will be considered as advance tax for FY 2020-21. So a trader can determine the profits between 15th March to 31st March and pay the tax on 31st March, there will be no interest levied.

    Hope this helps!

  7. Hi @TEst_Netflix,

    Tax audit is applicable when:

    1. Turnover is above the threshold limit
    2. Profit is >=6% of the turnover

    You can use this tool to determine if tax audit is applicable to you:

    It is always a good practice to file your ITR and report all your financial transactions to avoid notice from the Income Tax Department. Especially after the SEBI and CBDT’s data partnership. If your total income is below the basic exemption limit, you won’t have any tax liability.

  8. Do I have to pay Advance Tax if the TDS for the year is sufficient to cover tax liabliltiy?

    Does Dividend on equity shares attract separate Advance Tax or is it just another source of income?

  9. Hi @vivek25,

    You are liable to pay advance tax if your total outstanding tax liability for the financial year after TDS is above INR 10,000.

    To calculate your advance tax liability you need to add your estimated income for the financial year from all sources including - Salary, House Property, Capital Gains, Business & Profession and other sources.
    Next, subtract all eligible deductions, expenses, and Tax Credit available to you.
    Now, if your outstanding tax liability is above INR 10,000, you need to pay advance tax to avoid penalty u/s 234B and 234C.

    Hope this answers your query :slight_smile:

    You can also use the advance tax calculator to know your advance tax liability under the old and new tax regime

  10. Hi
    When I pay the advance tax through the ZERODHA-QUICKO platform, does it get saved/stored? For example I have paid for Q1. so when I have to pay for Q2, will this be automatically calculated?

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