Question 1

Who is required to pay advance tax under Indian Income-tax law?

Accepted Answer

Under Section 208 of the Income-tax Act, 1961 (and Section 402 of the Income-tax Act, 2025), any taxpayer whose estimated net tax liability for the financial year—after deducting eligible TDS and TCS credits—is ₹10,000 or more is statutorily required to pay advance tax. Senior citizens (aged 60 or above) who are resident in India and have no income from business or profession are statutorily exempt under Section 207(2).

Question 2

How does presumptive taxation under Section 44AD / 44ADA affect the advance tax schedule?

Accepted Answer

Under Section 211(1)(b) (Section 408(2) of the 2025 Act), taxpayers who declare profits under presumptive taxation schemes (Section 44AD or 44ADA) pay the whole advance tax in a single instalment on or before the 15th day of March of the financial year, not in four quarterly instalments. There is no 15 June, 15 September or 15 December target, and a shortfall at 15 March carries 1% simple interest (Section 425(3) of the 2025 Act).

Question 3

What is the First Proviso relief for Capital Gains under Section 234C(1)?

Accepted Answer

Under the First Proviso to Section 234C(1), where a shortfall in advance tax occurs due to underestimation or inability to foresee capital gains, lottery/gambling income, first-time business profits, or dividend income, interest under Section 234C is NOT charged for quarters prior to the accrual of such income, provided the taxpayer pays the tax on such income in the remaining instalments that are due (or on or before 31st March if no instalment remains).

Question 4

What is the difference between Section 234B and Section 234C interest?

Accepted Answer

Section 234C penalizes deferment or shortfall in paying specific quarterly instalments during the financial year (1% simple interest per month for 3 months on Q1, Q2, Q3 shortfalls, and 1 month for Q4). Section 234B penalizes default in overall advance tax payment: if total advance tax paid on or before 31st March is less than 90% of assessed tax, 1% simple interest per month is charged on the unpaid assessed tax starting from April 1 of the assessment year until the date of determination.

Question 5

Do payments made between 16 March and 31 March count as advance tax?

Accepted Answer

Yes. Under the Second Proviso to Section 211(1), any amount paid by way of advance tax on or before the 31st day of March is treated as advance tax paid during the financial year. While payments made between 16 and 31 March are technically late for the 15 March milestone under Section 234C, they ARE fully credited for the Section 234B 90% safe-harbour test and extinguish Window-5 capital gains liability under the First Proviso.

Question 6

What is Rule 119A statutory floor rounding?

Accepted Answer

Under Rule 119A of the Income-tax Rules, for calculating interest under Sections 234A, 234B, and 234C, any fraction of a month is deemed a full month, and the amount of tax or shortfall on which interest is calculated is rounded down to the nearest multiple of ₹100 by discarding any fraction of ₹100.

Question 7

How does salary TDS protect an employee from Section 234C interest?

Accepted Answer

Under Section 192, employers deduct TDS proportionately every month. Under Section 209(1)(d), this TDS is deducted from gross tax liability when determining advance tax obligations. If you have only salary income and your employer deducts appropriate TDS, your Net Assessed Tax is zero or negligible, completely protecting you from advance tax mandates and interest penalties.

Question 8

Is any personal financial data stored on HeyArtha servers?

Accepted Answer

No. The Advance Tax tool runs entirely in your browser. Your figures are calculated in your browser. Analytics and the optional feedback form are separate; see the Privacy page.