Advance Tax Payment Rules 2023: Every individual, including salaried employees, is required to pay advance tax if his/her tax liability for the year is more than Rs 10,000.
Advance Tax Payment Rules: Every individual, including salaried employees, is required to pay advance tax if his/her tax liability for the year is more than Rs 10,000. For salaried employees, employers generally deduct the advance tax from their monthly salary and submit it to the tax department.
According to Archit Gupta, Founder and CEO of Clear, the Rs 10,000 or more limit is arrived after the deduction of all the tax credits of TDS/TCS/foreign tax credit/Section 89 relief etc. from the original estimated tax liability.
Here’s a look at advance tax payment rules for salaried, NRIs, senior citizens, and professionals.
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Advanced Tax Payment Rules for Salaried Individuals
Tax on salary is deducted by the employer, so there is no need to be concerned about advance tax. However, it is to be noted that during the year when a change in employment happens, then there is a big possibility that the new employer, not having any idea about previous employment, has computed tax incorrectly and deducted tax based on that.
“In this case, the individual is advised to check the tax computation and inform the new employer. If they are not deducting tax as they should be, the individual can take the matter in their own hand and pay the tax on their own to avoid the interest on non-payment of advance tax,” says Gupta.
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Advance Tax Payment Dates and Limit
The payment of advance tax needs to be made as per the dates and limits mentioned in the following table:
Advance Tax Payment Rules for Professionals
Gupta says professionals, who are opting for presumptive taxation, need to pay the entire amount of advance tax within the 15th of March of the concerned financial year, as opposed to payment of advance tax on a quarterly basis applicable to all the other assessees
Advance Tax Payment Rules for NRIs
The provisions of advance tax apply in the same way as on the other resident assessees. In case an NRI’s estimated tax liability for the year is Rs.10,000 or more, s/he shall pay his tax in advance.
Advance Tax Payment Rules for Senior Citizens
A senior citizen who is a tax resident (i.e., an individual of the age of 60 years or above during the relevant financial year) who does not have any income from a business or profession is not liable to pay advance tax.
