Income tax return

What is Advance Tax Payment? How and When to Pay Advance Tax


When income tax is paid ahead of the due date, it is said to be paid as “advance tax” for the relevant fiscal year. The payer must still provide a full-year income forecast under advanced tax laws. Under advance tax regulations, the payer has to give a full-year income projection. Further, the tax is paid at certain periods depending on the estimation above. To determine whether advance tax payments are required and, if so, how much, the taxpayer must estimate their income and then compute the expected tax on that amount.

What is Advance Tax Payment?

Advance tax payments are due on or before the due dates established by the Income Tax Department. Since payments are made throughout the fiscal year, “pay as you earn” tax is another name for advance tax.

According to the I-T Department, the government now accepts advance tax payments at any branch of several banks. You can make advance tax payments online and offline by following the procedure below.

Online Advance Tax Payment Procedure

After accessing the Income Tax Department’s online payment gateway, please proceed as follows:

  1. Make your choice for the kind of tax that applies here: (0020) Corporation Tax.
  2. Select “(100) Advance Tax” as your payment type.
  3. You choose the month of payment that works best for you.
  4. Fill in the required fields with your PAN, email, assessment year, phone number, and address. Click the “Proceed” button. Once you’ve done that, the website will take you to either the payment gateway or the net banking page, depending on how you choose to pay.
  5. Make the payment. Always keep duplicates of the challans you use to make payments if you need to reference them when submitting your business’s ITR.

Offline Advance Tax Payment Procedure

  1. Please visit any participating bank branch to get a copy of the tax payment challan (Challan 280).
  2. Please complete this form to the best of your ability. The information requested on the form is identical to its electronic equivalent.
  3. Carry the completed Challan 280 form and the cash to the teller counter of the right bank. You pay your taxes with cash or a check.
  4. After you hand over your cash and challan, a bank employee will rip out a section of the challan, fill in your payment information, and stamp it as proof of payment.
  5. If you pay your taxes in advance, whether electronically or in person, you should retain your receipts securely as evidence of payment. It takes ten days for the change to appear on your Form 26AS. “Part C—Details of Tax Paid” on Form 26AS is where you should provide your tax payment information.

Advantages of Paying Advance Tax

  • There is less strain on taxpayers when taxes are paid in advance. People might save stress and financial hardship by making tax payments in advance.
  • It shortens the time spent collecting taxes.
  • If the government can generate interest on the money it collects, it will have more money available for spending.
  • People who pay their taxes in advance are less likely to fall behind on their obligations.
  • It’s useful for financial planning and gives firms a feel for their annual earnings.

Who Must Pay Advance Tax?

  • You must meet the following requirements to be eligible for advance tax payments:
  • You need to have a tax bill of at least Rs. 10,000.
  • It would help if you were either a wage earner or the owner of your own business.
  • Profits from stock sales are taxable income.
  • The return on savings deposits.
  • Winnings received from a lottery.
  • Rental income.
  • Income from other sources.

Which Tax Forms to Submit?

Challan No. ITNS 280 must be submitted by the due dates specified. Challan No. ITNS 280 requires the following to participate:

  • The full PAN specifics

Please be sure to post the correct PAN data. Otherwise, your tax payments are credited to the wrong account.

  • Assessment year

The tax payment is being sent out ahead of time for the future fiscal year, so be sure to choose the right assessment year for which the tax is due.

  • Choose your preferred method of payment

The taxpayer is responsible for selecting the appropriate payment method. The term “advance tax” describes a situation in which taxpayers pay their tax liability before the end of the current fiscal year based on their expected yearly revenue. This kind of tax is known as self-assessment tax and is due if the payment is made after the fiscal year ends. A CIN number will be issued upon successful payment. You will need this CIN to file your tax returns, so write it down. Finally, double-check that the IT department has indeed obtained the ITNS 280 online payment.

Who Needs to Make Advance Tax Payments?

If your annual tax bill is $10,000 or more, you must make an advance tax payment following Section 208 of the Income Tax Act. In the case of FY 2019-2020, if your tax burden is expected to be more than $10,000, you will be obliged to make an advance tax payment in the current year.

Those with income from sources other than a regular wage must pay taxes in advance. Your annual income must be greater than the threshold for professionals, self-employed individuals, and businesspeople. Earnings from stocks and bonds, interest from savings and checking accounts, rent, and other sources of rental income all count. Those above 60 do not have to pay the advance tax.

Advance Tax Payments: Exemption

People aged 60 and older are exempt from the advance tax payment requirement. Those who receive a salary and fall within the TDS net do not need to submit an advance tax payment. Non-wage income, however, is subject to taxation in advance. 

It includes interest, rent, capital gains, and other forms of investment income. The need to pay the advance tax is waived if the amount of TDS deducted is greater than the amount owed for the year.


Individuals with income from sources other than a regular paycheck must make advance tax payments. It includes income streams such as rent, stock appreciation, interest on savings accounts, lottery wins, etc. You pay for it at certain banks or online.

Income tax for a certain fiscal year paid in advance is referred to as “advance tax.” Generally, taxes are expected to be paid when a corresponding income is received. Nonetheless, the tax laws of the advance tax require the payer to provide an annual income forecast.

You can also go through the website of Piramal Finance to clear all your doubts.