2 min read
15 July 2025

Advance tax refers to income tax paid in parts throughout the year, rather than paying it all at once at the end. If your estimated total tax payable during a financial year exceeds Rs. 10,000 (after accounting for TDS), you are required to pay tax in advance. This applies to income that doesn’t have TDS automatically deducted – such as earnings from rent, capital gains, lottery winnings, interest on fixed deposits, and freelance work. Advance tax must be paid according to due dates set by the Income Tax Department. These payments help the government receive tax steadily, and help you avoid a large lump sum at the end of the year. Failing to pay on time attracts interest.

Advance tax due date

For the financial year 2025–26, the first advance tax instalment is due on June 15 2025. You should pay 15% of your total estimated tax liability for the year by this date. This is just the first of four instalments scheduled across the financial year. It’s important to follow these due dates carefully to avoid interest charges. The rest of the instalments follow in September, December, and March. Advance tax can be paid online easily via the official income tax portal.

What is advance tax?

Advance tax is the system of paying income tax in smaller portions during the year based on your estimated annual income. Rather than waiting to pay at the end of the year, you make these payments in four fixed instalments. If your total tax liability (after considering TDS) exceeds Rs. 10,000, you must pay advance tax. This applies whether you are salaried, self-employed, or earning income from other sources. If you don’t pay your advance tax as required, interest charges will be added to your final tax bill. The due dates for these payments are announced by the Income Tax Department each year.

Who should pay advance tax?

Advance tax is mandatory if your annual tax liability is more than Rs. 10,000. This applies to a wide range of individuals:

  • Salaried individuals, professionals, freelancers, and business owners must pay advance tax if their estimated tax for the year crosses the Rs. 10,000 mark. Even salaried persons earning additional income (like rent or capital gains) must check if they fall under this rule.
  • Senior citizens aged 60 or above who do not run any business or profession are exempt from advance tax, regardless of how much their income is.
  • Presumptive income under section 44AD (for businesses): These taxpayers must pay their full advance tax amount in a single payment on or before March 15 of the financial year. Alternatively, they can pay the whole amount by March 31.
  • Presumptive income under section 44ADA (for professionals): Professionals such as doctors, lawyers, and architects under this scheme must also pay the full advance tax by March 15, or latest by March 31.
  • Presumptive scheme under section 44AE (for certain businesses): These taxpayers must follow the standard four-instalment structure as per income tax guidelines.

To summarise, if your total tax after adjusting for TDS is over Rs. 10,000, and you don’t qualify for an exemption, you are liable to pay advance tax within the set deadlines.

Advance tax due dates for FY 2025-26 (AY 2026-27)

For regular taxpayers (individuals and companies)

Here are the important dates for advance tax payments in the financial year 2025–26:

Due date

Advance tax payable

On or before June 15

15% of total tax liability

On or before September 15

45% of total tax liability minus tax already paid

On or before December 15

75% of total tax liability minus tax already paid

On or before March 15

100% of total tax liability minus tax already paid


Note: If you pay at least 12% by the June deadline and 36% by the September deadline, interest under section 234C will not apply.

For taxpayers under presumptive taxation (Section 44AD/44ADA)

Due date

Advance tax payable

On or before March 15

100% of estimated tax in one payment

 

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How to make advance tax payment online?

You can pay advance tax online quickly by following these simple steps:

  • Step 1: Visit the official Income Tax Department portal.
  • Step 2: Click on ‘e-Pay Tax’ from the Quick Links section or use the search bar to find it.
  • Step 3: Enter your PAN and mobile number, and click ‘Continue’.
  • Step 4: Input the OTP received on your mobile and click ‘Continue’.
  • Step 5: Choose ‘Income Tax’ and click ‘Proceed’.
  • Step 6: Select the correct Assessment Year (2026–27) and Type of Payment as ‘Advance Tax (100)’, then proceed.
  • Step 7: Enter your tax details carefully.
  • Step 8: Select a payment method and bank.
  • Step 9: Preview the challan. If everything is correct, click ‘Pay Now’. If not, click ‘Edit’.
  • Step 10: After successful payment, a confirmation screen will display your BSR code and Challan Serial Number. Save or download the receipt for your records—you’ll need these details while filing your tax return.

What is advance tax late payment interest?

Interest is charged under two sections if advance tax is not paid properly:

1. Section 234B – Non-payment or insufficient payment

If you pay less than 90% of your total tax liability by March 31, interest is charged at 1% per month on the unpaid amount.

2. Section 234C – Delay in instalment payments

Situation

Interest rate

Interest period

Amount on which interest is charged

Less than 15% paid by June 15

1% per month

3 months

15% of total tax minus amount paid before June 15

Less than 45% paid by September 15

1% per month

3 months

45% of total tax minus amount paid before September 15

Less than 75% paid by December 15

1% per month

3 months

75% of total tax minus amount paid before December 15

Less than 100% paid by March 15

1% per month

1 month

100% of total tax minus amount paid before March 15


Failing to make timely payments can increase your tax burden. So, keep track of the instalment dates and amounts carefully.

How advance tax payment calculated?

To work out your advance tax liability for the year, follow these easy steps:

  • Step 1: Estimate your total income for the financial year from all sources—this may include salary, rent, capital gains, professional income, and interest from fixed deposits.
  • Step 2: Subtract deductions under relevant sections like 80C (PPF, LIC, etc.) or 80D (health insurance).
  • Step 3: Calculate the tax on the remaining amount based on your applicable tax slab.
  • Step 4: Reduce any TDS (Tax Deducted at Source) already deducted or expected to be deducted. If the tax still payable is more than Rs. 10,000, you need to pay advance tax.

Here’s a sample format to understand the process:

Particulars

Amount (Rs.)

Gross total income

XXX

(-) Deductions under Chapter VI

XXX

Net Total Income

XXX

Tax on net income

XXX

(+) Surcharge (if applicable)

XXX

(+) Health and education cess

XXX

Gross tax liability

XXX

(-) TDS/TCS

XXX

Net tax payable as advance tax

XXX


Advance tax should be paid as:

  • 15% by June,
  • 45% by September,
  • 75% by December,
  • 100% by March.

Example for advance tax calculation

Let’s see how Anil, a freelancer in interior decoration, calculates and pays advance tax for FY 2025–26.

Details:

  • Estimated gross receipts: Rs. 20,00,000
  • Business expenses: Rs. 12,00,000
  • Investment in PPF: Rs. 40,000
  • LIC premium: Rs. 25,000
  • Medical insurance: Rs. 12,000
  • TDS on professional income: Rs. 30,000
  • Interest on fixed deposits: Rs. 10,000

Calculation:

Description

Amount (Rs.)

Income from profession

 

Gross receipts

20,00,000

(-) Expenses

12,00,000

Net business income

8,00,000

Interest on fixed deposits

10,000

Gross total income

8,10,000

(-) Deduction under 80c

 

PPF

40,000

LIC premium

25,000

(-) Deduction under 80d

12,000

Total deductions

77,000

Total taxable income

7,33,000

Tax payable (as per slabs)

59,100

Add: cess (4%)

2,364

Gross tax liability

61,464

(-) TDS

30,000

Advance tax to pay

31,464


Payment schedule:

Due date

% Payable

Amount (Rs.)

June 15

15%

4,700

September 15

45% (cumulative)

14,100 – 4,700 = 9,400

December 15

75% (cumulative)

23,500 – 14,100 = 9,400

March 15

100% (final)

31,400 – 23,500 = 7,900


Note: This calculation is based on the old tax regime, which allows deductions under sections like 80C.

Understand advance tax applicability in detail

As a salaried individual, you are not liable to pay advance tax. It is because your employer levies TDS on your salary every month based on your investment and expenditure declarations. In turn, they submit this information to the income tax department regularly.

However, if you have varied sources of income as a salaried individual, are a professional, or a businessman, irrespective of TDS, you will have to file advance tax if you have a hefty tax liability. Moreover, if you win a lottery or earn capital gains on your shares, in the absence of TDS, you will have to pay advance tax on these incomes, too, after adjusting them with your expenses or losses.

To put it simply, businesses or corporates whose income is spread across varying sources have a high tax liability. So, advance tax's applicability is more prominent as it avoids last minute discrepancies and helps maintain transparency all through the financial year. To elaborate further, as per income tax regulations, if your tax liability exceeds Rs. 10,000 in a financial year, then you will have to pay an advance tax under Section 208. Senior citizens who do not have a business or profession are exempt from paying advance tax.

What are the due dates for advance tax?

All taxpayers eligible to pay advance tax have to pay up to 15% advance tax by 15th June, up to 45% advance tax by 15th September, up to 75% by 15th December, and up to 100% advance tax by 31st March.

How to file advance tax in FY 2024-2025?

Given the above advance tax payment due dates, you will have to estimate your current income and your investments for deductions and then derive your advance tax payment figure. You can use the Income tax calculator available online at Bajaj Finserv to calculate your tax obligation for the financial year 2024-25. You will have to enter a few basic details in this calculator about your income and investments to arrive at the amount you need to pay.

After paying the first, second, and third installment of advance tax, if there is a change in your tax liability, you can revise the amount you were to pay as advance tax in your next installment payment. Moreover, when calculating your liability, do not forget to consider the tax relief allowed under Section 90 or Section 90A, deductions under Section 91, and tax credits allowed under Section 115JAA or Section 115JD. If you are eligible for any of these or all, you must account for them when calculating your final tax liability.

What is the penalty for not paying advance tax on time?

If you are liable to pay advance tax and pay less than your total liability of the first or second installment, you will have to pay interest on the defaulted amount at 1% simple interest per month for three months. However, if you pay less than what you’re supposed to as the last installment, then the 1% interest on the defaulted amount will be calculated for every month until the time you clear your dues in full.

On the other hand, if you pay higher advance tax than your total liability, you will receive a refund of the excess amount. Furthermore, if your exceeding amount is above 10% of your liability, you will receive 6% interest on the exceeding proceeds from the Indian Income Tax department.

Other topics you might find interesting

How to Check ITR Filed or Not

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How to File ITR Using Form 16

How to Download Income Tax Return File

How to File ITR 2

How to File ITR for Non Salaried Person

How to File ITR Without Form 16

How to File Income Tax Return

How to File ITR 3

How to File ITR for Pensioners

How to File Nil ITR Return

How to File Income Tax Return ITR 4

How to File ITR After Due Date

How to File ITR for Previous Years

How to File ITR for First Time

How to File Income Tax Return Online for Salaried Employees

 

 

 


Conclusion

Advance tax is a crucial part of responsible tax planning. If your estimated tax liability is more than Rs. 10,000 in a year (after TDS), make sure to pay it in instalments as per the government’s schedule. This prevents last-minute tax burden and avoids interest under sections 234B and 234C. On the other hand, if you overpay, you are eligible for a refund. Timely and accurate advance tax payments help you stay compliant and avoid penalties, while also supporting the government in maintaining a steady flow of funds throughout the year.

Smart tax management is just one aspect of comprehensive financial planning. If homeownership is part of your long-term financial goals, exploring your financing options early can help you make informed decisions. Bajaj Finserv offers attractive home loan rates starting from 7.49%* p.a with quick approval in 48 hours*. Check your loan offers with Bajaj Finserv today. You may already be eligible, find out by entering your mobile number and OTP.

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Frequently asked questions

When should I pay advance tax?

You need to pay advance tax if your total tax payable for the financial year, after deducting TDS, is more than Rs. 10,000. The tax must be paid in instalments during the year, following the schedule set by the Income Tax Department—starting from June 15 and ending by March 15 of the financial year.

I made a mistake while paying advance tax. Can I fix it?

Yes, you can correct it online. The Income Tax Department allows changes to be made to the assessment year, major head, or minor head in the challan. You must correct the assessment year within 7 days and the other details within 30 days of payment.

How can I use the challan correction feature online?

Log in to the income tax e-filing portal. Go to the Services tab and select "Challan Correction". Start a correction request by selecting the type of correction you need—assessment year, major head, or minor head. Verify your correction using Aadhaar OTP, EVC, or DSC. Once done, you’ll receive a confirmation message and a transaction ID.

I’m an NRI. Do I have to pay advance tax?

Yes, NRIs are required to pay advance tax if their total tax liability (after TDS) for the financial year exceeds Rs. 10,000. The same rules and due dates apply unless income is fully subject to TDS in India and there is no further liability.

I’m a senior citizen with only pension and interest income. Do I need to pay advance tax?

If you are a resident senior citizen (60 years or older) and do not earn any income from business or profession, you are exempt from paying advance tax, even if your tax liability is more than Rs. 10,000.

What happens if I don’t pay advance tax?

If you fail to pay advance tax on time or pay less than required, you will be charged interest under Sections 234B and 234C of the Income Tax Act. The interest is charged at 1% per month on the unpaid amount.

Can I claim deductions like 80C when estimating income for advance tax?

Yes, you should consider all eligible deductions such as those under section 80C (like PPF, LIC), 80D (health insurance), and others while estimating your income for advance tax. This helps you calculate your liability more accurately and avoid overpaying.

What if I miss the March 15 deadline for the fourth instalment of advance tax?

If you miss paying by March 15, you can still make the payment on or before March 31. It will still be considered as advance tax, not a late payment. However, paying after March 31 may attract interest, so it’s best not to delay.

How do I pay advance tax?

You can pay advance tax online using Challan 280 via the Income Tax Department’s e-filing website. Follow the steps provided under the e-Pay Tax option. You can also pay it offline at a bank using the same challan.

Why is it important to pay advance tax?

Paying advance tax helps you avoid a large tax burden at the end of the year. It also prevents interest charges for late payments. For the government, it ensures a steady income flow throughout the year. It’s a win-win for both.

How do I check the status of my advance tax payment?

Visit https://tin.tin.nsdl.com/oltas/index.html, choose the CIN-based view, and enter the required details. You can also log in to your income tax account and view Form 26AS to see a list of your payments.

How do I write a cheque for advance tax payment?

To pay offline, download Challan 280, fill in your details including PAN, and draw a cheque in favour of the bank’s name followed by “A/c Income-tax”. Make sure the receipt contains the BSR code, date of payment, and challan number.

How can I download my advance tax payment challan?

You can view or download your challan receipt from https://tin.tin.nsdl.com/oltas/index.html by selecting the CIN-based view. You may also find it on the bank’s website if you paid online. Always save a copy for future reference.

Can I pay advance tax after the due date?

Advance tax must ideally be paid in four instalments by the scheduled dates: June 15, September 15, December 15, and March 15. If you miss a date, interest at 1% per month will apply until you make the payment.

How do I pay advance tax for capital gains?

Capital gains are often unpredictable, so if you earn such income after a due date, pay the advance tax in the next instalment. If no instalment remains, pay it before March 31 to avoid any interest.

How do I calculate advance tax correctly?

Estimate your total income from April 01 to March 31. Subtract applicable deductions and exemptions, calculate tax based on the selected tax regime, and reduce any TDS already paid. If the net tax exceeds Rs. 10,000, pay it in instalments.

How to deal with unpredictable income while paying advance tax?

For uncertain incomes like lottery winnings or sudden capital gains, pay advance tax in the next available instalment. If none remain, pay it by March 31. This way, you can still avoid interest charges under the tax rules.

What is the minimum advance tax that must be paid by March 31?

You must pay at least 90% of your total tax liability by March 31. If this minimum isn’t met, interest under section 234B will apply at 1% per month on the shortfall. To avoid this, plan your instalments carefully and pay on time.

How is interest calculated if I don’t pay advance tax on time?

Interest is charged under section 234C if you miss or underpay an instalment. It’s 1% per month on the shortfall, based on how much should have been paid by each due date (June, September, December, or March). The interest period varies from 1 to 3 months.

What percentage of tax should be paid by September 15?

By September 15, you should have paid 45% of your total tax liability. If you’ve already paid 15% by June, then only the remaining 30% is due. Failing to meet this target may result in interest under section 234C.

Do salaried individuals also have to pay advance tax?

Usually, salaried individuals don’t need to pay advance tax themselves because their employer deducts TDS from their salary. However, if they have other sources of income and TDS is not enough to cover total tax liability, they may need to pay advance tax directly.

If you are a salaried individual with stable income looking to purchase a home, your regular income can work in your favour for loan approval. Bajaj Finserv offers competitive home loan rates for salaried professionals. Check your eligibility for a home loan from Bajaj Finserv today. You may already be eligible, find out by entering your mobile number and OTP.

What if I overpay my advance tax?

If you pay more advance tax than your actual liability, the extra amount will be refunded to you after filing your income tax return. You can track the refund status through the income tax portal.

Tax refunds can provide additional funds for major purchases like a home down payment. If you are planning to buy a home, consider how your refund could strengthen your financial position for a loan application. Bajaj Finserv provides home loans up to Rs. 15 Crore* with flexible terms. Check your loan offers with Bajaj Finserv now. You may already be eligible, find out by entering your mobile number and OTP.

Can advance tax be paid offline at the bank?

Yes, advance tax can be paid offline using Challan 280 at authorised banks. Just make sure to fill in your details correctly, including your PAN and assessment year. The bank will give you an acknowledgment with a challan number—keep this safe for filing returns.

What is the last date to pay advance tax for the year?

The final deadline to pay advance tax is March 15. If you miss this date, you can still pay by March 31 and it will be treated as advance tax. Paying after this may lead to additional interest being charged.

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