Advance tax collection: Advance tax collection till June 16 of the financial year 2025 has increased by 28 percent to Rs 1.48 lakh crore as compared to the same period last year. In the period between April 1 and June 16, corporate tax collection was Rs 1.6 lakh crore, while personal tax collection was Rs 3.79 lakh crore.
A total tax of Rs 5.15 lakh crore has been collected during this period. There has been a strong increase of 22.89 percent in total tax collection during this period as compared to last year. Business channel ET Now has given this information quoting sources.
What is advance tax?
Advance tax is the tax you pay before the end of the financial year on the income earned in the same year. Under this, you have to pay in installments, instead of paying the entire amount at once at the end of the year. These installments can be deposited by 15 June, 15 September, 15 December and 15 March. In the case of salaried individuals, their company deducts the tax before crediting their salary at the end of the month.
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However, the taxpayer may also have other sources of income including interest from deposits, capital gains on sale of shares and mutual funds, etc. In such a situation, income from these sources should also be taken into account in calculating the advance tax liability.
Payment of advance tax in instalments
You have to pay 15% of your estimated advance tax liability on June 15. By September 15, you have to pay 45% of the amount due, 75% of the amount due by December 15 and 100% of the remaining amount by March 15. However, the rules are slightly different for self-employed businessmen and professionals who have opted for the presumptive taxation scheme. Though they too have to pay advance tax, they get certain concessions. They can make a one-time payment in the last quarter of the financial year by March 15. This concession has been extended because small businessmen may find it difficult to estimate their advance tax liability at the beginning of the financial year.
Who has to pay advance tax?
Advance tax payment is mandatory for every person whose net income tax liability exceeds Rs 10,000 in any financial year. The estimated tax amount after deduction of TDS (tax deducted at source) for a financial year is known as net tax liability. If your total tax liability after TDS exceeds Rs 10,000, you will have to pay advance tax.
Also keep in mind that all persons having a net income tax liability of more than Rs 10,000 in a financial year are not required to pay advance tax. The Income Tax Act also provides some relaxation in this rule.
According to Income Tax Act section 211, taxpayers are required to pay advance tax in four quarterly instalments between June 15 and March 15 of every financial year. Those who opt for the presumptive taxation scheme are required to pay advance tax in a single instalment by March 15. Senior citizens (above 60 years of age) are exempted from paying advance tax if they do not have any business or professional income.
