HomeFinancePersonal FinanceDo you require to spend advance tax on capital gains from shares, dividends?

Do you require to spend advance tax on capital gains from shares, dividends?

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While we file Income Tax Return (ITR) for the preceding economic year to settle tax liability or claim a refund, advance tax comes into the image in the year in which you make an revenue. As per the Income Tax guidelines, advance tax is needed to be paid by any taxpayer, like salaried personnel, whose tax liability is Rs 10,000 or more following paying TDS, TCS or MAT Credit.

However, senior citizens, who are residents of India and do not have revenue from small business or profession, do not have to make the advance tax payment.

Now that a lot of persons are investing in stock markets and generating capital gains and also earning from dividends, it is a popular query if they require to spend advance tax. It is critical to comprehend right here that advance tax is paid when you can make an earning. However, in the case of capital gains or dividends, it is challenging to make an estimate of earnings in advance. Hence, authorities say that advance tax on such earnings need to be made on the applicable due date only following getting the revenue receipt. If no instalment is due, then a taxpayer can spend the tax by 31st march of the applicable economic year.

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Advance Tax Payment Due Dates

Taxpayers have to spend advance tax in 4 instalments in a year. The 4 due dates (if not extended for some cause) for paying advance tax in a year are:

  1. On or just before 15th June: Up to 15% of tax liability
  2. On or just before 15 September: Up to 45% of tax liability
  3. On or just before 15 December: Up to 75% of tax liability
  4. On or just before 15 March: Up to one hundred% of tax liability

For instance – The next due date is 15th December. So if a particular person is liable to spend advance tax, he/she need to spend up to 75% of his/her tax liability by this date.

Advance tax payment can be made on www.tin-nsdl.com


If a particular person fails to spend advance tax on time then he/she has to spend an quantity of interest beneath Sections 234B and 234C. However, if a particular person has cleared one hundred% of his/her dues by 15th March, then he/she would not have to spend any tax at the time of filing ITR. As the Income Tax Department would adjust the advance tax paid by you against the total tax liability. In case of distinction in between tax liability and tax paid, the taxpayer would have to spend the balance quantity along with interest.

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