Guide to Advance Tax Filing in India for FY 2024-25

As the financial year 2024-25 draws to a close, taxpayers in India are gearing up for an important tax compliance obligation—advance tax payment. The final due date for paying 100 percent of the advance tax for FY 2024-25 is March 15, 2025. If an individual’s total tax liability for the year exceeds INR 10,000 (US$114.87), they are required to pay advance tax in accordance with the Income Tax Act, 1961.

Understanding advance tax filing in India

Advance tax refers to the income tax paid in advance rather than in a lump sum at the end of the financial year (April 1 to March 31). It applies to individuals with incomes from sources such as:

• Rent
• Capital gains
• Dividends
• Interest income
• Business or professional income

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One may note that for salaried individuals, employers usually deduct and deposit tax through Tax Deducted at Source (TDS). However, if an individual earns income from other sources, you must compute and pay advance tax yourself if your total liability exceeds INR 10,000 (US$114.87).

Eligibility for advance tax filing

As per the provisions of the Income-tax Act, 1961, under sections 208 to 219:

• A taxpayer (individual, Hindu Undivided Family (HUF), company, or firm) whose estimated tax liability for the financial year exceeds INR 10,000 (US$114.87) is required to pay advance tax.
• This applies to all taxpayers, including those earning from business, profession, capital gains, interest, rent, and dividends.

However, as per Section 207 of the Income Tax Act, a resident senior citizen (aged 60 years and above) who do not have income from business or profession is exempt from advanced tax liability, regardless of total income.

For taxpayers opting for presumptive taxation under Section 44AD/44ADA of the act, 100 percent of advance tax must be paid on or before March 15, 2025.

Failure to pay advance tax may lead to interest under the Income Tax Act, 1961:

• Section 234B: If 90 percent of tax is not paid by March 31, an interest rate of one percent per month applies.
• Section 234C: Interest applies for non-payment or shortfall in each installment.

Calculation of advance tax

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1. Estimate total income from all sources (salary, business, capital gains, rental, dividends, etc.).
2. Deduct eligible deductions under Chapter VI A of the Income Tax Act (80C, 80D, etc.) to calculate taxable income (only available under the old tax regime).
3. Compute tax liability using applicable income tax slab rates, including surcharge (if applicable) and 4 percent cess.
4. Deduct tax credits such as TDS, tax collected at source (TCS), and minimum alternate tax (MAT) credit.
5. Pay advance tax online via Challan No. 280 on the Income Tax e-filing portal.

How to pay advance tax online

1. Visit the income tax department official website. Click here: https://www.incometax.gov.in.
2. Enter the credentials using the user ID to log in to the account.
3. Go to the tab “e-Pay Tax” and select Challan No. 280.
4. Fill in the details, compute your tax, and make payment via net banking, UPI, or debit card.

Conclusion

Advance tax helps streamline tax collections and reduce the burden of a large lump-sum payment at year-end. Timely compliance also helps avoid unnecessary interest penalties. With March 15, 2025, the deadline approaching, taxpayers may assess their income and ensure to meet advance tax obligations in time.

(US$87.04)

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