Received a notice from the department? Read this first
Most notices are routine requests, not accusations. How to read one calmly, what to check and when to call us.
Advance tax: four dates and a simple way to estimate
If your tax for the year will exceed ₹10,000, you pay it in instalments. The dates, the percentages and a quick method.
Most salaried people never think about advance tax, because their employer deducts tax every month. But if you run a business, earn from a profession, receive rent or interest, or sold shares at a profit, you may have to pay tax during the year, not at the end of it.
The rule is simple. If your total tax for the year, after tax deducted at source, will be more than ₹10,000, you pay it in four instalments: at least 15 per cent by 15 June, 45 per cent by 15 September, 75 per cent by 15 December and the full amount by 15 March. Businesses and professionals using presumptive taxation can pay the whole amount by 15 March in one go. Missing an instalment attracts interest of 1 per cent a month on the shortfall.
To estimate, take your income so far, add a fair guess for the rest of the year and work out the tax under your chosen regime. Subtract the tax already deducted at source and see what is left. In June, it is fine to be rough; by December, use your actual books for nine months.
Capital gains are the usual surprise. A large sale of shares in January means a larger March instalment, and interest is not charged on gains that arise after a due date if you pay them by the next one. We send our clients a WhatsApp reminder ten days before each date, with an estimate based on the figures they have shared.
