AbhishekBatabyalHelpful In: 4. Taxes & Duties > Income Tax What is advance tax? What is advance tax? Share Facebook You must login to add an answer. Username or email* Password* Captcha* Remember Me! Forgot Password? Need An Account, Sign Up Here 1 Answer Voted Recent Ayushi Curious Pursuing CA 2021-10-27T04:56:35+00:00Added an answer on October 27, 2021 at 4:56 am By the name, it can be easily deduced that Advance tax means the tax paid in advance. Advance tax is the tax paid by an assessee in the Previous Year itself based on his estimated income. We know that Income tax liability is known in the Assessment Year based on the income of the Previous Year. But, the government encourages the taxpayers to pay the tax in the Previous Year itself based on the estimated income. As per section 208 of the Income Tax 1961, if the total income liability on the estimated income comes up more than Rs. 10,000, then advance tax has to be paid. The advance tax has to be paid according to the following schedule for the individual and corporate assessees [Other than the assessee who computing profits on a presumptive basis under section 44AD(1) and 44ADA(1)]: Due date of Instalment Amount Payable On or before 15th June No less than 15% advance tax liability. On or before 15th September No less than 45% of tax liability, as reduced by any amount if any paid in the earlier instalment. On or before 15th December No less than 75% of tax liability, as reduced by any amount or amounts if any paid in the earlier instalments. On or before 15th March No less than 100% of tax liability, as reduced by any amount or amounts if any paid in the earlier instalments. Any amount paid by the way of advance tax on or before 15th March shall be treated as advance tax paid during each financial year on or before 15th March. Also as per section 219, the tax credit is given for the advance tax paid in the regular assessment of income tax. In case of non-payment or short payment of the advance tax, interest is payable as per section 234B. Interest is also attracted in case of delayed payment of advance tax as per section 234C. That’s all, I would conclude my answer hoping that it was helpful in making the concept of advance tax easy to grasp. 0 Share Share Share on Facebook Share on Twitter Share on LinkedIn Share on WhatsApp Related Questions What is composite supply and mixed supply? What is the concept of supply in GST? What are the steps involved in computation of income tax as per the Income tax act, 1961? What is reverse charge in GST? What is Alternate Minimum Tax? Is agricultural income taxable in India? How to determine residential status of an individual as per Income Tax Act, 1961?