Quarterly Tax Payments

Quarterly tax payments are tax installments paid by taxpayers throughout the financial year instead of a lump-sum payment at the end of the year. This system is designed to spread the tax liability over the year and reduce the burden on the taxpayer.

Key Features:

Who Pays Typically applicable to: Self-employed individuals Professionals and businesses with income not subject to Tax Deducted at Source (TDS) Corporates with advance tax obligations

Frequency Paid quarterly, based on estimated income: 1st Quarter: 15% of estimated tax by 15th June 2nd Quarter: 45% of estimated tax by 15th September 3rd Quarter: 75% of estimated tax by 15th December 4th Quarter: 100% of estimated tax by 15th March Purpose

Ensures timely collection of taxes by the government.

Reduces interest or penalties for underpayment at the end of the year.

Helps taxpayers manage cash flow better.

Adjustment in Final Return

The total quarterly payments are adjusted against the final tax liability when filing the Income Tax Return (ITR). Any excess payment is refunded, and any shortfall attracts interest.

Example: Estimated tax for FY 2023-24 = ₹1,00,000 Quarterly payments: June 15 → ₹15,000 September 15 → ₹30,000 December 15 → ₹30,000 March 15 → ₹25,000 Total = ₹1,00,000, adjusted against the final assessed tax