Meaning of advance tax for companies
Advance tax refers to the income tax paid in installments during the financial year instead of a lump sum at year-end. It helps the government collect revenue throughout the year.

• It applies to companies with tax liability exceeding ten thousand rupees
  
• Companies must estimate their income and tax at regular intervals
  
• The tax is payable in four installments as prescribed by law
  
• It reduces the burden of year-end tax payments and interest liabilities
  

Eligibility criteria for advance tax payment
Every company, whether domestic or foreign, is required to pay advance tax if it expects taxable income. It is a mandatory provision under the Income Tax Act.

• Applicable to all companies earning taxable income in India
  
• Foreign companies with Indian-sourced income must also pay
  
• Newly incorporated companies are not exempt if liability arises
  
• Minimum tax liability threshold is ten thousand rupees annually
  

Installment schedule for corporate advance tax
Companies must follow a quarterly payment schedule for advance tax. Each installment must cover a fixed percentage of the estimated annual tax liability.

• First installment of fifteen percent is due by fifteenth June
  
• Second installment of forty five percent is due by fifteenth September
  
• Third installment of seventy five percent is due by fifteenth December
  
• Final installment of hundred percent is due by fifteenth March
  

Calculation method for advance tax liability
Companies need to project their expected income and compute tax accordingly. They must account for deductions, exemptions, and surcharge while estimating total tax.

• Estimate total income after allowable business expenses
  
• Apply the applicable corporate tax rate and surcharge
  
• Deduct TDS, MAT credit, and foreign tax credit if available
  
• Divide the balance liability as per the quarterly schedule
  

Consequences of default or underpayment
Non-payment or short payment of advance tax results in interest and penalties. These are charged under various sections of the Income Tax Act and increase total liability.

• Interest under section 234B is charged for underpayment of tax
  
• Interest under section 234C applies to deferred installment payments
  
• Penalty may be imposed in cases of deliberate evasion
  
• Interest is calculated monthly and is not adjustable or refundable
  

Modes of payment and filing process
Companies must pay advance tax online using authorized payment gateways. The payments are linked to the company’s PAN and must be recorded properly.

• Payments are made through Challan ITNS 280 on the income tax portal
  
• Net banking, debit card, or RTGS options are available
  
• Proper accounting head and assessment year must be selected
  
• Receipts must be retained and reconciled during return filing
  

Adjustment and reporting in tax returns
After the financial year ends, the total advance tax paid is adjusted against final tax liability. This is disclosed in the income tax return of the company.

• Advance tax paid reduces final payable tax or adds to refund
  
• Must be reported in Schedule IT of the income tax return
  
• Credit appears in Form 26AS and Annual Information Statement
  
• Any excess tax paid can be claimed as refund in the return