Advance Tax Deadline: Can you pay advance tax on 16 December without penalty? know here

Advance Tax 15 December 2024 Deadline : The third installment of advance tax for the financial year 2024-25 is to be paid by 15 December 2024. However, banks will be closed on 15 December 2024 as it is a Sunday.

In such a situation, taxpayers may wonder if they can make this payment on 16 December 2024 i.e. Monday? If the income tax liability of the taxpayers is more than Rs 10,000, then it is mandatory to pay advance tax. If the payment is not made on time, taxpayers may have to face penalty and interest.

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Income tax department rules

According to the Income Tax Department’s circular dated 14 January 1994, if the last date for advance tax payment falls on a public holiday or Sunday and the bank is closed on that day, then the taxpayer gets the next working day for payment. In this case, no penalty or interest will be levied on the taxpayer under Section 234B and 234C of the Income Tax Act 1961.

Can you pay advance tax on 16 December without penalty?

The third installment payment for the financial year 2024-25 can be made on Monday, 16 December 2024, as 15 December is a Sunday. In this case, no penalty or interest will be levied on taxpayers. Taxpayers can pay their third installment of advance tax on December 16 without any worry.

Advance tax: Payment is made in four installments

Advance tax has to be paid in four installments in the same financial year in which the income is earned.

15% – till 15 June

45% – By September 15 (includes 1st instalment)

75% – By 15th December (includes 1st and 2nd instalment)

100% – by 15 March

Who has to pay advance tax?

If you still have a tax liability of Rs 10,000 or more after deducting TDS on your income, then you will have to pay advance tax. Apart from salary, this also includes income from rent, capital gains, FD interest, or lottery winnings.

What will happen if advance tax is not paid?

If you do not pay advance tax or pay it late, you will have to pay a penalty as per section 234B and 234C under the Income Tax Department. The rate of this penalty is 1% per month.

Section 234B: If you have not paid 90% of the total tax by March 31, then you will have to pay interest at the rate of 1% per month.

Section 234C: Interest will be charged at the rate of 1% per month for four installments at different times. Hence, it is very important to pay the advance tax on time to avoid additional penalty.

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