March 15 is last date for payment of the last instalment of Advance Tax for the financial year 2022-2023. . The Income Tax Department has also recently appealed to taxpayers to pay their last instalment of advance tax by the due date.
“Attention Taxpayers! The last date for payment of the last instalment of Advance Tax is almost here! Do remember to pay your fourth & final instalment of Advance Tax by 15th March, 2023,” the tax department said in a tweet.
What is Advance tax?
Advance tax is the amount of income tax that should be paid in installments as per the income tax department’s due dates rather than in one lump sum at the end of the fiscal year. The first installment i.e. 15 percent of the total amount should be paid by 15th June. The payment of second Installment or 45 percent of the tax should be made by 15th of September. The third installment of the 75 percent of the advance tax should be cleared by 15th December. The remaining amount or 100 percent of the tax should be paid on or before 15th March.
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According to the tax department’s official website, every individual whose estimated tax liability for the year is ₹10,000 or more shall, as per section 208, pay his tax in advance in the form of advance tax. The income tax is calculated as per the provisions of the Income Tax Act, 1961 (Act)
However, the rule does not apply to senior citizens who are not supposed to pay any advance tax unless they have an income from a business or profession.
Penalty if you fail to pay Advance tax
When a taxpayer fails to pay their income tax prior to the due date, they would be liable to pay interest on the unpaid tax under sections 234B and 243C.
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If an individual fails to pay the advance tax liability or misses any of the installments on or before the specified due dates or there is a shortfall in payment, the due amount will attract interest of 3% per quarter for the first 3 quarters and 1% for the final quarter. An individual will also be liable to pay additional interest from April (after the end of financial year) at the rate of 1% per month on the shortfall of advance tax, in case the advance tax paid by such an individual is less than 90% of the total tax payable.
