Advance Tax: Did you miss the March 15 deadline for advance tax? If your annual tax liability is more than Rs 10,000, you are required to pay it in four installments, rather than all at once.
However, if you are a salaried employee, your tax is typically deducted through TDS (Tax Deducted at Source), so you usually don’t need to pay advance tax separately.
But, if you have additional income apart from your salary, ensure you pay advance tax by March 15.
If you missed this, ask your employer to deduct more TDS before March 31 to avoid interest charges. Here’s what you need to know.
When Do You Need to Pay Advance Tax?
If you earn extra income apart from your salary, and your employer is unaware of it, you will need to pay advance tax yourself.
This extra income can be from sources such as freelance or part-time work, rental income, stock market or mutual fund profits, or profits from selling property.
If you fail to pay the advance tax for this additional income by March 15, the Income Tax Department may charge interest under sections 234C and 234B.
Easy Way to Avoid Interest
If you missed paying advance tax by March 15, don’t worry. There is a simple way to avoid paying interest.
All you need to do is inform your employer before March 31 and ask them to deduct additional TDS from your March salary.
How to Do It?
Between March 16 and March 31, notify your employer that you have earned extra income outside of your salary.
Request them to deduct more TDS from your March salary so the remaining advance tax liability is covered.
By doing this, you can avoid interest under sections 234C and 234B.
Will Every Employer Agree?
While employers are legally allowed to do this, some companies finalize tax-related declarations in January or February, so they may not accept your request in March.
Additionally, if your salary isn’t high enough to deduct extra TDS, this method may not work.
What If the Employer Doesn’t Agree?
If your employer refuses to deduct extra TDS in March, you will need to pay the advance tax on your own before March 31.
If you pay after March 31, you will be charged additional interest under Section 234B starting April 1.
