Are You Required to Pay Advance Tax? If Yes, Why, How Much, and What If Not Paid? Know Here!
Why Do You Need to Pay Advance Tax?
If you earn additional income from freelancing, capital gains, rental properties, or interest, advance tax ensures you meet your tax obligations on time, avoiding surprises during filing.
How Much to Pay?
- Calculate your total income (salary + additional income).
- Subtract TDS and eligible deductions.
- Pay tax on the remaining liability.
What Happens If You Don’t Pay?
Missing payments attracts penalties:
1️⃣ 1% Penalty per Month (Section 234B & 234C)
Example
For ₹2,00,000 capital gains with ₹25,000 tax due:
- A 3-month delay = ₹1,250 penalty.
2️⃣ Loan Application Impact: Penalties in ITR may signal financial indiscipline to lenders, reducing loan approval chances.
3️⃣ Tax Scrutiny: Repeated non-compliance invites audits.
4️⃣ Reduced Savings: Penalties eat into disposable income, limiting investments.
How to Avoid Penalties?
💡 Estimate your income, calculate tax liability, and pay before March 15 to stay compliant and financially secure.
Advance tax is more than compliance—it’s about safeguarding your financial future. Act now to avoid penalties and maintain a strong financial profile. ✅