The cliché answer to the question is: No. You can only pay the income tax on your taxable income for the financial year after 31st March, not before that date. But there are some exceptional situations where you might be able to pay your advance tax before 31st March. These exceptions can be explained by the word ‘exceptional’ in every case. You cannot escape taxes by postponing it to another date but certain situations may force you to do so. For example: If you are retiring soon and want to lock away your money in a fixed deposit instead of spending it;If you have exhausted all your savings and will not be able to pay your advance tax this year;Or if you are moving into a rented house and cannot get a home loan right now, etc. In any one of these circumstances, filing an application with your accountant or CA and paying the amount as per their advice will help you avoid penalty while saving on taxes at the same time.
Advance Tax Can Be Paid After 31st March
When you calculate your advance tax, you are allowed to deduct a certain percentage of your expected income as advance tax. You can pay the rest of it anytime before or after 31st March. If you anticipate that your taxable income will be less than what you estimated while calculating advance tax, you can pay the excess amount before 31st March and get a refund later. You cannot get a refund for the amount you paid as advance tax after the due date.
You can pay your advance tax if you are retiring soon
You must have built up a sizeable amount in your PF account over the years. This is money invested by you in your PF account over the years and which the government has been regularly adding to this account with interest. So if you have made enough money in the PF account and are retiring soon, then you can pay your advance tax by withdrawing from this account. This amount will be added to your taxable income and you will have to pay taxes on it. But you will have saved the interest that the PF account would have generated for you over the years.
You can pay your advance tax if you have exhausted all your savings
You would have been saving money for some emergency or unforeseen situation. But when that situation actually arises, your savings may not be enough. In such a situation, you can pay your advance tax by withdrawing the money from your fixed deposit, the amount of which is taxable. You will have saved the interest on your fixed deposit and may still be able to save on taxes as well.
You can pay your advance tax if you are moving into a rented house and cannot get a home loan right now
This is a temporary situation but you may be forced to pay your advance tax before 31st March by withdrawing the amount from your fixed deposit at a lower interest rate. After a few months, when you have saved enough to pay off the advance tax, you can again get the FD deposit with a higher interest rate.
Exception: If you are an employee, with no business income.
If you are an employee, with no business income, then you are exempted from paying advance tax.
In the article above, we have seen that Advance Tax Can Be Paid After 31st March. But there are certain situations where you can pay your advance tax before that date. Advance tax is necessary but paying it before the due date may come with some consequences. You may get a lower interest rate or, in extreme cases, a penalty. But in some exceptional circumstances, you can pay your advance tax before the due date.
- F.A.Q. (Frequently Asked Questions) Income Tax
- Return of Income Taxes
- How to Check Status of Income Tax Refund?