Quick Summary
The Income-tax Act requires taxpayers to pay advance taxes if their liability exceeds Rs. 10,000. However, under Section 234C, interest is charged for a full three-month period until the next installment date, which can be particularly unfair for certain groups, such as gig workers. This has raised the question: Will Budget 2024 introduce amendments to address this issue? Current Advance Tax Requirements For salaried individuals, disclosing total income, including non-salary portions like ba
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FAQ :
Taxpayers must pay advance tax if their tax liability exceeds Rs. 10,000. This involves estimating total income, deducting eligible exemptions and deductions, and then calculating the tax payable.
Gig workers and freelancers often find it difficult to estimate their annual income accurately early in the financial year due to fluctuating project availability and market conditions.
Section 234C charges interest for late advance tax payments. Even a one-day delay can result in interest being charged for a full three-month period, which is considered stringent.
Proposals include increasing the Rs. 10,000 threshold for advance tax, providing broader relaxations for freelancers and individuals with variable income, and potentially deferring liability for the first two quarters.
Yes, senior citizens who do not earn income from a business or profession are exempt from paying advance tax. Small taxpayers using the presumptive taxation scheme can also pay their entire advance tax in one installment.
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