Advance Tax is a tax paid in advance which is also called pay-as-you-earn tax. In India, every person whose estimated tax liability for the financial year 2022-23 is Rs. 10,000 or more, is liable to pay his tax in advance under "Advance Tax" category as per section 208 of the Income Tax Act. Tax payer has the option of paying Advance Tax in 4 instalments over the financial year. This advance tax can be paid in following 4 instalments as per the due dates decided by the income tax department for the year 2022-23:
A resident senior citizen (an individual of the age of 60 years or above during 2022-23) not having any income from business or profession is not liable to pay advance tax as per section 207 of the Income Tax Act.
Any person who is opting for the presumptive taxation scheme under sections 44AD and 44ADA needs to pay Advance Tax of the whole amount in one installment on or before 15th March 2023.
There will be a penalty for default in payment of Advance Tax u/s 234B of the Income Tax Act. This penalty will be levied on the tax payers towards non-payment, late-payment or short payment of individual's instalments of advance tax.
The interest for such default in payment of advance tax is levied at 1% simple interest per month or part of a month. The penalty interest is levied on the amount of unpaid advance tax.