Advance tax: who pays, when, and how much
Who has to pay advance tax, the four instalment dates and percentages, how to estimate the amount, and the interest you pay if you fall short.
Income tax is meant to be paid as you earn. Salaried employees get this through TDS. If you earn income without full TDS, such as business profit, professional fees, rent, interest or capital gains, you pay in instalments during the year. That is advance tax.
Who has to pay
You must pay advance tax if the tax you expect to owe for the year, after subtracting TDS and any tax credits, is ₹10,000 or more. This applies to individuals, firms, LLPs and companies.
Exemptions:
- Resident individuals aged 60 or above who have no income from business or profession
- Taxpayers whose total tax after TDS is below ₹10,000
The four instalments
| Due date | Cumulative share of the year's tax |
|---|---|
| 15 June | At least 15% |
| 15 September | At least 45% |
| 15 December | At least 75% |
| 15 March | 100% |
"Cumulative" means each date counts what you have already paid. If you owe ₹1,00,000 for the year, you should have paid at least ₹15,000 by 15 June, ₹45,000 in total by 15 September, and ₹75,000 in total by 15 December.
Taxpayers who opted for presumptive taxation for business or profession can pay the whole advance tax in a single instalment by 15 March.
How to estimate
- Estimate your total income for the year: business or professional profit, rent, interest, capital gains, and any other income.
- Subtract eligible deductions.
- Work out the tax on the net amount using the slab or regime you will opt for.
- Subtract TDS you expect to have deducted during the year.
- Apply the instalment percentages to what remains.
Update your estimate each quarter. Income that arrives late in the year, such as capital gains from a sale, should be paid in the remaining instalments of the year, not carried until the return.
Interest if you fall short
- Section 234C: interest of 1% per month on the shortfall in each instalment, for the period the shortfall continues.
- Section 234B: interest of 1% per month if the advance tax you paid by 31 March is less than 90% of your assessed tax, counted from 1 April until you pay.
Both are in addition to the tax itself, and are computed in the return. Paying self-assessment tax before filing stops further interest.
How to pay
Pay online through the income tax e-filing portal or through net banking using a challan, selecting advance tax as the type of payment and the correct assessment year. Keep the challan details, since they must be entered in the return.
Practical tips
- Set reminders for the four dates in your compliance calendar.
- Keep a separate account for tax so the money is available.
- Reconcile your payments against Form 26AS and AIS before filing.
- When income changes sharply, make an extra payment in the next instalment rather than waiting.
Advance tax is a small part of the return. See the income tax return due dates and late fee and which ITR form to file. For help with estimates and filing, see income tax return services.
Questions people ask
Who must pay advance tax?
Anyone whose estimated tax liability for the year, after reducing TDS, is ₹10,000 or more. Resident senior citizens with no business or professional income are exempt.
What are the advance tax due dates?
15 June, 15 September, 15 December and 15 March, with cumulative payments of at least 15%, 45%, 75% and 100% of the year's estimated tax.
Do freelancers and small businesses pay advance tax?
Yes. Business and professional income is not subject to TDS in full, so tax is often payable in advance. Taxpayers under the presumptive scheme can pay the whole amount in one instalment by 15 March.
What if I miss an instalment?
Interest under section 234C applies for each instalment that falls short, and interest under section 234B applies if the total paid by year end is less than 90% of the assessed tax.
Keep reading
- Which ITR form should you file? ITR-1 to ITR-7 explainedHow to pick the right income tax return form: ITR-1 to ITR-7, who each one is for, and the situations that push you from a simple form to a longer one.
- ITR filing last date: due dates by taxpayer, late fees and what to do if you miss itHow the income tax return due date depends on who you are, what a late return costs, and how to file a belated return if you miss the date.
- TDS return filing due dates: 24Q, 26Q, 27Q, deposit dates and late feesWhen TDS must be deposited and when quarterly TDS returns are due, which form covers which payment, and what late filing costs under sections 234E and 271H.
This page is general information, not professional advice. Rules and due dates change by notification; confirm on the official portal or with a qualified CA or CS before you act. Filedge is a technology platform; services are delivered by independent qualified professionals.
Want an expert to handle it?
Create a free account, pick a filing, and see the fee before you pay.