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Advance tax is a pay-as-you-earn system under the Income Tax Act, 1961, requiring taxpayers to pay income tax in instalments if their liability exceeds INR 10,000 after TDS or TCS. Knowing who is liable to pay advance tax and the advance tax due dates helps you stay compliant and avoid interest.
Advance tax is a prepaid income tax system that requires taxpayers to pay their estimated tax liability in instalments rather than a single lump sum during the financial year. Section 208 of the Income Tax Act, 1961 mandates the payment of advance tax according to estimated earnings Advance income tax can be paid through the taxpayer’s bank account or as directed by the Assessing Officer.
Taxpayers whose estimated tax liability exceeds INR 10,000 in a financial year, after adjusting TDS or TCS, are required to pay advance tax. Categories liable to pay include:
During the financial year, advance tax liability is divided into four instalments:
Instalment Due Date
Cumulative Advance Tax Payable
15 June
15% of total tax liability
15 September
45% of total tax liability
15 December
75% of total tax liability
15 March
100% of total tax liability
Note: These advance tax dates are generally the same during any financial year. However, the government may extend the due dates on its own by providing notifications during unprecedented situations.
To determine your advance income tax payment, estimate your total tax liability for the year using these steps:
You can pay the advance income tax payment online through the official income tax e-payment system. Follow these steps:
Step 1: Go to the official income tax e-filing portal and log in using your PAN (which is your user ID), password, and captcha code.
Step 2: After logging in, click on e-File and go to e-Pay Tax. Select New Payment to proceed.
Step 3: Choose Income Tax and then select Advance Tax (100) as the type of payment. This is paid using Challan ITNS 280.
Step 4: Select the relevant Assessment Year (AY) corresponding to the financial year for which you are paying advance tax.
Step 5: Enter the tax amount under the appropriate head (Income Tax, Surcharge, Cess, Interest, etc.). Ensure the total matches your calculated advance tax liability.
Step 6: Choose your preferred payment method (net banking, debit card, or payment gateway). Confirm your payment details and proceed to complete the payment.
To manage your finances and track your tax payments efficiently, you can open a bank account with DBS Bank for easy online transactions and savings.
After advance income tax payment, you can verify it by checking the Form 26AS or the Annual Information Statement (AIS) in the Income Tax e-Filing portal. The challan details and amount are reflected under the tax paid section. If the payment does not reflect within a few days, you can contact your bank or raise a grievance through the portal.
Missing an advance income tax can lead to interest charged on the unpaid portion of your advance tax liability. Under Income Tax Act, 1961 the Sections 234B and 234C define the conditions for how interest is applied on advance tax defaults.
Certain types of income and specific categories of taxpayers are subject to modified advance tax rules. These provisions address situations where income may arise unpredictably or where simplified taxation schemes apply.
Capital gains are often unpredictable, as they arise when a capital asset such as shares, mutual funds, or property is sold. If capital gains occur after an earlier instalment due date, the taxpayer is required to pay the applicable advance tax in the remaining instalments of the same financial year. Interest under Section 234C generally does not apply if the tax on such gains is paid in the subsequent instalment.
Taxpayers who have not paid advance tax in earlier instalments can still pay the entire outstanding liability on or before 15th March of the financial year. While this ensures compliance before year-end, interest under Sections 234B and 234C may still apply for delay or short payment in earlier quarters.
Taxpayers opting for presumptive taxation under Sections 44AD, 44ADA, or 44AE are not required to pay advance tax in four instalments. Instead, they must pay the full advance tax liability in a single instalment on or before 15 March of the financial year.
Non-resident Indians are also required to pay advance tax if their tax liability in India is in excess of INR 10,000 after adjusting TDS. This would commonly apply in cases where income from capital gains, rental property, or any other source leads to additional tax payable over and above TDS deducted at source.
Advance tax ensures your tax liability is distributed across the financial year instead of becoming a lump-sum burden at year-end. Timely estimation and payment not only help you stay compliant but also prevent unnecessary interest under Sections 234B and 234C. Reviewing your income periodically and paying instalments accurately keeps your finances structured and predictable.
For smooth digital transactions and hassle-free online tax payments, consider opening an instant savings account with DBS Bank.
It is mandatory only if their total tax liability exceeds INR 10,000 after adjusting TDS. Pure salary income covered fully by employer TDS does not require advance tax.
Advance tax is paid during the financial year based on estimated income, while self-assessment tax is paid after year-end to clear any remaining liability before filing the return.
Interest may be charged under Sections 234B and 234C for short payment or delay. The outstanding amount must be paid along with applicable interest.
Yes, you can adjust the remaining instalments based on revised income estimates. No separate form is required for revision.
Excess tax paid can be claimed as a refund while filing your income tax return. The refund is processed after assessment by the department.
Taxpayers under Sections 44AD, 44ADA, or 44AE must pay the entire advance tax in one instalment on or before 15th March instead of quarterly payments.
