How to Pay Advance Tax Online?

The following steps are to be followed to pay advance tax online:

Step 1: Visit the e-filing portal of the Income Tax Department of India.

Step 2: Click on ‘Quick Links’ on the left side of the home page and then click on ‘e-pay Tax’.

Step 3: Enter the ‘PAN Number‘ and ‘Mobile Number’ and click on ‘Continue‘ to proceed.

Step 4: Enter the 6-digit OTP received on your mobile number and ‘Continue’.

Step 5: Select the first tab named as ‘Income Tax’ and then click on ‘Continue’.

Step 6: Select the ‘Assessment Year’ and ‘Type of Payment’ as ‘Advance Tax (100)’ and then click on ‘Continue’.

Step 7: Fill out all the tax details.

Step 8: Select the mode of payment and the bank and click on ‘Continue’.

Step 9: Preview the challan details and click on ‘Pay Now’ to make the payment. Click on ‘Edit’ on right side corner to edit any detail if required.

Step 10: Once the payment is completed, an acknowledgement will appear on the following screen. The BSR code and challan serial number will be displayed on the challan’s right side that need to be preserved as BSR code and challan number are needed to fill the tax return.

Note:

Those who are not comfortable with this online advance tax payment method may use the offline payment facility by submitting the challan at the Income Tax Department authorized bank branches.

Advance Tax is defined as an income tax paid on an estimated annual income to the government before the end of the financial year. The taxpayers estimate their total annual income for the financial year, calculate their tax liability based on this estimate, and make periodic payments of taxes. This means instead of paying a lump-sum tax amount at the end of a financial year, taxes are paid in installments on specific due dates decided by the tax authority.

Key takeaways from Advance Tax:

• Advance Tax is based on the principle of “Pay-as-you-earn”.
• In India, every person whose estimated tax liability for the year is ₹10,000 or more, shall pay “Advance Tax” [Section 208, Income Tax Act].
• A system of advance tax benefits both the government and the taxpayer. For the government, the advance tax system ensures a regular and timely inflow of revenue, and for taxpayers, it reduces the burden of paying lump-sum amounts at the end of a financial period.