Second Installment of Advance Tax (Q2)

Under Section 208 of the Income Tax Act, taxpayers with an estimated net tax liability exceeding ₹10,000 must pay their taxes in advance. For the second installment due on September 15th, you are required to have paid at least 45% of your total estimated advance tax for the financial year (less any amount already paid in the first installment).

Important Considerations:

1. Penalties for Shortfall: If the total advance tax paid on or before September 15th is less than 45% of your total assessed tax liability, it attracts penal interest under Section 234C at a flat rate of 1% per month for three months on the short amount. 2. Recalculation of Liability: It is highly recommended to re-evaluate your estimated income for the year at this stage. If you have had sudden spikes in income (like selling property, booking stock market profits, or receiving large dividends) during Q2, your total advance tax liability will increase, and this installment must reflect that change. 3. Presumptive Taxation Exemption: Small business owners and professionals who have opted for the Presumptive Taxation Scheme under Section 44AD or Section 44ADA remain exempt from this September deadline. They are only required to pay a single installment of 100% by March 15th.