Advance Tax Payment: Hurry Up! Deadline For Third Instalment Nearing, What Should Taxpayers Do?

The Income Tax Department has reminded taxpayers to make the payment of the third instalment of advance tax by December 15, 2023. Every taxpayer whose estimated tax liability for the year is Rs 10,000 or more is liable to pay advance tax. That being said, only three days are left for the due date to end.

Through its X handle, the IT department said, "Kind Attention Taxpayers: Do remember to pay the third instalment of Advance Tax by 15th December 2023."

The department highlighted that any assessee, including salaried employees, whose tax liability for the financial year as reduced by tax deducted or collected at source is Rs 10,000 or more is required to pay advance tax.

Further, the department directed the modes of advance tax payment. These are:

- e-Payment is mandatory for all corporates and also those assessees whose accounts are required to be audited under section 44 AB of the Income Tax Act, 1961.

- e-Patment is convenient for other taxpayers also as it ensures correct credit.

As per the guidelines, advance tax can be paid by the taxpayer either on his own account or in pursuance of an order from the Assessing Officer. The taxpayer who is liable to pay advance tax is required to estimate his current income and pay advance tax on his own account. In such a case, he is not required to submit any estimate or statement of income to the tax authorities.

Furthermore, after making payment of the first second or third instalment of advance tax (as the case may be), if there is a change in the tax liability, then the taxpayer can revise the quantum of advance tax in the remaining instalment(s) and pay the tax as per revised estimates.

Also, tax can be computed on the current income (estimated by the taxpayer) at the rates in force during the financial year. From the tax so computed, tax deducted or collected at source will be deducted and the balance tax payable will be used to compute the advance
tax liability.

Additionally, relief of tax allowed under section 90 or section 90A any deduction under section 91 or any tax credit allowed to be set off as per section 115JAA or section 115JD shall also be deducted while computing the advance tax liability.