Advance tax is applicable if your 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. Hence, advance tax is also called a ‘pay-as-you-earn’ tax, and payment should be done at quarterly intervals. The advance tax payment due date is on the 15th of the last month of each quarter.
What are the methods for advance tax payment?
There are 3 methods to pay advance tax.
1) Online via TIN NSDL
2) Offline via Bank Branch
3) Online via IT portal
1. Steps for Online Payment of Advance Tax via TIN NSDL
- Access the TIN NSDSL e-payment Portal.
Visit the TIN NSDL e-payment portal and Select Challan 280.
- Select the tax applicable and Payment Type.
Select the Tax Applicable as (0021) Income Tax (Other than Companies). Later, select the type of payment as (100) Advance Tax.
- Select the Mode of Payment and name of the Bank.
Next, select the mode of payment from the different options and the name of your Bank.
- Enter the Details asked.
Enter PAN and Other Details including your email Id and contact number.
- Select the Assessment Year.
After selecting the Assessment Year, enter the captcha and click on Proceed.
- Click on “Submit to the bank”.
Verify the details that were entered and Click Submit.
- Now you can log in to the net banking account of your bank to make the payment.
Once you make the payment you will get a challan counterfoil with Bank details. Save it for future reference.
2. Steps for payment of Advance Tax Offline
- Visit the bank branch and ask for the applicable tax payment challan form-Challan 280 (in this case).
- Fill in the details as required in the form. The details asked in the form are the same as required in the online form.
- Go to the relevant bank’s counter and submit the filled-in Challan 280 form along with the money. The tax payment can be made either in cash or by cheque.
- Once you give the money and challan and the bank official will give you a receipt by tearing off a portion of the challan, filling in the details of payment, and stamping it.
3. Steps for Advance Tax Payment online via IT portal
Below are the steps to make online payment via IT portal:
- Visit the e-filing portal
- Now navigate to e-pay tax
- Enter PAN/TAN & Mobile number and verify using OTP
- Now select the Income tax category
- Add the relevant Assessment year & select advance tax payment under minor head 100 as the type of payment
- Further, add tax break-up details
- Select the payment mode > continue > pay now
- Select I agree to the terms and conditions and click on submit to the bank
Payment can be done through Netbanking, Credit card, Debit card, UPI, Pay at bank counter, RTGS/NEFT, or payment gateway.
Once you have completed the payment by either online or offline method, you should keep the receipts safely as proof of payment. It can approximately take up to 10 days to reflect in your Form 26AS. Your income tax payment should show in your Form 26AS component ‘Part C – Details of Taxes Paid’.
You can know details of Advance tax paid from your Form 26AS. Hence download Form 26AS from the income tax e-filing portal and show the same in your ITR.
In case your bank does not have an online payment facility or is not an authorized bank then you 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.
Paying taxes online saves time and such a facility can be availed easily irrespective of time and place.
Yes, if income in India exceeds INR10,000. they are liable to pay advance tax.