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Learn how advance tax works, including eligibility, due dates, calculation steps, and how payments are made during the financial year.
Last updated on: Apr 29, 2026
Advance tax is the income tax payable by individuals who earn from other sources along with their salary. It is paid in instalments during the financial year instead of a lump sum at the end. It applies when the total tax liability exceeds a specified threshold and helps align tax payments with income earned across the year. Rent, capital gains from shares, fixed deposits, lottery, etc. are a few examples of income sources covered under advance taxation.
Advance tax is applicable to individuals, professionals, businesses, and companies whose estimated tax liability, after adjusting for TDS or TCS, exceeds ₹10,000 in a financial year.
Income sources that may lead to advance tax liability include:
Salary with insufficient TDS: When employer deductions do not fully cover tax liability
Business or professional income: Earnings from self-employment or business activities
Capital gains: Profits from sale of shares or other assets
Interest income: Earnings from fixed deposits or savings instruments
Rental income: Income generated from house property
Other income: Such as lottery winnings or casual income
Advance tax ensures that tax payments are spread throughout the year rather than concentrated at year-end.
Advance tax liability depends on the level and nature of income earned during the year:
Tax liability threshold: Applicable if total tax payable after TDS/TCS exceeds ₹10,000
Salaried individuals: Required if TDS deducted by employer is not sufficient
Self-employed individuals and professionals: Includes freelancers, consultants, and business owners
Companies and firms: Applicable across organisational structures
Income from other sources: Such as capital gains, interest, or rental income
Additional considerations include:
Senior citizens with business income: Required to pay advance tax
Senior citizens without business income: Not required to pay advance tax
Advance tax is paid in instalments across the financial year based on specified percentages:
| Due Date | Percentage of Advance Tax Payable |
|---|---|
On or before 15 June |
15% |
On or before 15 September |
45% (less tax paid earlier) |
On or before 15 December |
75% (less tax paid earlier) |
On or before 15 March |
100% (less tax paid earlier) |
For taxpayers under presumptive taxation schemes, 100% of the advance tax is payable by 15 March. Payments made up to 31 March may still be considered for interest calculation, though the statutory due date remains 15 March.
Disclaimer: This table provides general advance‑tax timelines for informational purposes only. Please check the latest Income‑tax rules for guidance.
Advance tax can be paid online through the Income Tax Department’s e-filing portal, here’s a step-by-step breakdown:
1. Access the Portal
Visit the official Income Tax e-Filing portal at https://www.incometax.gov.in/. On the home page, locate the ‘Quick Links’ section on the left-hand side. Click on the ‘e-Pay Tax’ option.
2. Verification and Identification
Provide your Permanent Account Number (PAN) and re-enter it for confirmation. Enter a valid mobile number to receive an OTP, use it to verify your identity, and click on ‘Continue’.
3. Select the Correct Category
You will see different tiles for various tax types. Select the Income Tax tile and click on ‘Proceed’. For the current financial year (FY 2025-26), the Assessment Year is 2026-27. From the dropdown menu, select Advance Tax (100).
4. Tax Break-up
Enter the specific amounts under the relevant heads, such as Tax, Surcharge, Cess, Interest (if applicable), etc.
5. Payment Method
Choose your preferred mode of payment from the options typically included, like Net Banking, Debit Card, Payment Gateway (UPI, Credit Card), and RTGS/NEFT.
6. Review and Confirm
Carefully review the details on the summary screen to ensure the Assessment Year and Tax amounts are correct. Click on ‘Pay Now’ and accept the Terms and Conditions to be redirected to your bank’s gateway.
7. Save acknowledgement
Note any given code and challan number. You may need these details specifically when filing your Income Tax Return (ITR) later in the year to claim credit for the tax paid.
This digital process allows taxpayers to complete payments without visiting bank branches.
Challan 280 enables you to pay income tax online via the Income Tax Department’s official website. You have to select this challan and fill out the form to make an online advance tax payment. In case you want to pay it offline, you can download challan 280, fill it out, and then submit it at the bank.
Here are the documents that you need to submit for advance tax payment:
Aadhaar Card
PAN Card
Form 16, 16A, 16B, 16C
Form 26AS
Interest certificates issued by bank or post office
Tax saving investment proof
Salary slips and bank statement
Home loan statement
Capital gain statement
Understanding how advance tax is calculated helps in estimating tax liability across the financial year and aligning payments with income earned. The calculation is based on total income, applicable deductions, and taxes already paid.
The process involves a few structured steps:
Estimate total income: Add income from all sources such as salary, business or professional income, capital gains, interest, and rental income.
Apply eligible deductions: Reduce deductions available under Chapter VI-A, such as those under Sections 80C, 80D, and others, to arrive at taxable income.
Calculate tax liability: Compute tax based on the applicable income tax slab rates for the financial year.
Add surcharge and cess: Include applicable surcharge (if income exceeds thresholds) and health and education cess.
Adjust TDS and TCS: Subtract tax already deducted or collected at source during the year.
Determine final liability: If the remaining tax payable exceeds ₹10,000, advance tax becomes applicable.
Let’s understand this better by calculating the advance tax liability on an amount of ₹50,000:
| Due Date | Amount Payable |
|---|---|
By 15 June |
₹7,500 |
By 15 September |
₹15,000 |
By 15 December |
₹15,000 |
By 15 March |
₹12,500 |
Delays or shortfall in advance tax payments may attract interest under applicable provisions:
Section 234B:
Applies if less than 90% of total tax is paid by 31 March
Interest charged at 1% per month on unpaid amount
Section 234C:
Applies for shortfall in instalments
Interest charged at 1% per month for specified periods
Consider the following table:
| Instalment Shortfall | Interest Rate | Period |
|---|---|---|
Less than 15% by 15 June |
1% per month |
3 months |
Less than 45% by 15 September |
1% per month |
3 months |
Less than 75% by 15 December |
1% per month |
3 months |
Less than 100% by 15 March |
1% per month |
1 month |
Disclaimer: The advance tax schedule provided above is for general informational purposes only. Actual requirements may vary based on individual tax profiles. Please refer to the latest Income‑tax rules or consult a tax professional.
Reviewer
The advance tax limit is ₹10,000. If your total tax liability for the financial year exceeds ₹10,000, you must pay advance tax.
Yes, advance tax can be paid after 15th June in four instalments due on 15th June, 15th September, 15th December, and 15th March.
Yes, you can pay 100% of your advance tax if your tax liability exceeds ₹10,000 in a financial year. You can either pay in four instalments or choose to pay the full amount in advance.
Advance tax is calculated by estimating your total income for the year, applying the applicable tax rate, and subtracting deductions and taxes already paid. If the remaining amount exceeds ₹10,000, you must pay it as advance tax.
The principles of tax planning include minimising tax liability through legitimate methods, using relevant deductions, ensuring compliance with tax laws, and choosing tax-efficient investments to leverage available benefits.
Yes, you can pay advance tax online via the official website of the Income Tax Department.
An NRI whose income in India exceeds ₹10,000 must pay advance tax.
If you don’t pay the required tax by the fourth instalment, i.e. March 15, you should pay it at the earliest, preferably by March 31.
You can pay for the advance tax online via net banking.
You need to pay 15% of the advance tax on or before June 15, i.e., the first instalment. By the second, third, and fourth instalments, you must pay 45%, 75%, and 100% of advance tax liability. The due dates for these are on or before the 15th of September, December, and March, respectively.
If the Income Tax Department identifies that your paid tax is higher than the liability, then the government shall refund the excess amount. You can also claim a refund while filing ITR. The claim must be made within one year.
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