Advance tax is the mechanism by which taxpayers with significant income outside of TDS are required to pay tax in instalments throughout the year, rather than as a lump sum at year-end. Missing due dates attracts interest of 1% per month under Sections 234B and 234C.
Who Must Pay Advance Tax?
- Any individual (salaried or otherwise) whose estimated tax liability for the year exceeds \u20b910,000 after accounting for TDS
- Salaried employees: TDS on salary usually covers most tax liability, but those with significant other income (FD interest, capital gains, freelance income) may need to top up
- Senior citizens above 60 without business income: Exempt from advance tax
Advance Tax Due Dates for FY 2025-26
- June 15, 2025: At least 15% of estimated annual tax
- September 15, 2025: At least 45% cumulative
- December 15, 2025: At least 75% cumulative
- March 15, 2026: 100% (full balance)
Interest for Non-Payment
- Section 234B: 1% per month on shortfall from 90% of tax payable, from April 1 to date of payment
- Section 234C: 1% per month on shortfall at each instalment due date (for 3 months per instalment)
How to Pay Advance Tax
Pay online via Challan 280 on the income tax e-filing portal under \u2018Self Assessment / Advance Tax\u2019 heading. Select the correct assessment year.
Use the SaveTaxNow Calculator to estimate your advance tax liability and plan quarterly payments.