Important Reminder: Second Instalment of Advance Tax for FY 2023-24 (Assessment Year 2024-25) Due on September 15, 2023
As the financial year 2023-24 unfolds, it’s essential for individuals and businesses to stay on top of their tax obligations. One such obligation is the payment of Advance Tax, which helps in the smooth functioning of the nation’s finances and enables the government to fund various developmental activities.
What is Advance Tax?
Advance Tax, also known as ‘Pay-As-You-Earn’ tax, is the tax paid periodically throughout the financial year instead of a lump-sum payment at the end. This system ensures a steady flow of revenue for the government and eases the financial burden on taxpayers. It is applicable to individuals, professionals, self-employed individuals, and businesses, both resident and non-resident.
Due Date for the Second Instalment – September 15, 2023
For the financial year 2023-24, the second instalment of Advance Tax is due on September 15, 2023. This date holds significance for taxpayers who must pay their taxes in quarterly installments. The due date for the first installment was June 15, 2023, and the subsequent installments will be due on December 15, 2023, and March 15, 2024, respectively.
Who is Required to Pay Advance Tax?
Individuals: If your estimated tax liability for the financial year exceeds Rs. 10,000, you are liable to pay Advance Tax. This includes salaried individuals with other sources of income.
Businesses and Corporations: All companies and firms, including LLPs, must pay Advance Tax. The payment schedule depends on the turnover and profits of the business.
Professionals and Self-Employed Individuals: Doctors, lawyers, consultants, freelancers, and anyone with a substantial income from professional services must also adhere to the Advance Tax regime.
Benefits of Paying Advance Tax on Time:
Avoid Penalties: Timely payment of Advance Tax ensures that you do not incur penalties and interest under Section 234B and 234C of the Income Tax Act.
Better Financial Planning: By paying in installments, you can better plan your finances and allocate funds for tax payments.
No Last-Minute Hassles: Avoid the stress of arranging a significant lump-sum payment at the end of the financial year.
How to Calculate Advance Tax:
Estimate your total annual income from all sources.
Deduct eligible deductions under Sections 80C to 80U.
Calculate the tax liability based on the applicable income tax slab rates.
Divide this estimated tax liability into four installments, with the second installment due September 15, 2023.
Payment Modes:
You can pay Advance Tax through various modes, including online banking, NEFT, RTGS, and at authorized bank branches. Make sure to use the correct Challan Form and provide accurate details to avoid any discrepancies.
Filing Advance Tax Returns:
After making the payment, remember to file your Advance Tax return using Form 26QB or any other relevant form before the due date. This step is crucial to ensure proper credit for the tax paid.
Why Timely Payment is Essential:
Timely payment of Advance Tax helps you avoid last-minute financial stress and penalties. It also assists the government in effective revenue management for developmental projects and public services.
We strongly encourage you to calculate your Advance Tax liability for Q2 FY 23-24 and ensure payment by the 15th of September 2023 to stay compliant with tax regulations.
If you have any questions or need assistance with your Advance Tax calculations or payment process, don’t hesitate to reach out to the nearest Income Tax Department office or consult with a tax professional i.e. IConnect
In conclusion, paying Advance Tax is not just a legal obligation but a responsible way to contribute to the nation’s development while managing your finances efficiently. Mark September 15, 2023, on your calendar and make sure to meet your second installment of Advance Tax obligation for FY 2023-24 to avoid any unnecessary penalties and ensure a hassle-free tax season.