Advance tax: who pays and when

Advance tax means paying income tax during the year you earn the income instead of all at once after it ends. Salaried people with no other income rarely need to, because their employer’s TDS covers it. Freelancers, business owners, landlords and investors with big gains often do.

Do you need to pay it?

You pay advance tax if your estimated tax for the year, after TDS and TCS, is ₹10,000 or more. This is s.208 of the 1961 Act, which becomes s.404 of the Income-tax Act, 2025.

Senior citizens: a resident senior citizen (60 or over) with no business or professional income doesn’t have to pay advance tax (s.403(3) of the Income-tax Act, 2025).

Due dates for tax year 2026-27

Pay by	Total paid so far
15 June 2026	15% of the year’s tax
15 September 2026	45%
15 December 2026	75%
15 March 2027	100%

Presumptive scheme (44AD / 44ADA): if you use the presumptive scheme for business or professional income, you can pay the whole amount in one instalment by 15 March. This doesn’t apply to 44AE (goods vehicles).

How to work it out

1. Estimate your income for the whole year: salary, business or fees, rent, interest and capital gains.
2. Work out the tax on it. The income tax calculator can help.
3. Subtract TDS and TCS you expect to be deducted, which you can see in your AIS.
4. If what’s left is ₹10,000 or more, pay the instalments above.
5. Revise your estimate each quarter. You only need to pay the gap up to the next instalment’s percentage.

How to pay

Pay online through e-Pay Tax on the e-filing portal, choosing “Advance tax” as the payment type. Keep the challan, because you enter its details in your return.

If you pay late or too little

Interest is charged for short or late payment. Under the Income-tax Act, 2025:

• s.424 (was 234B): if you paid less than 90% of the assessed tax by 31 March, simple interest of 1% a month or part of a month runs from 1 April on the shortfall.
• s.425 (was 234C): a shortfall against the 15%, 45% or 75% instalment costs 3% of that shortfall, and against the 100% instalment 1%. No interest arises if you paid at least 12% by 15 June and 36% by 15 September.

Paying the balance as self-assessment tax before you file stops further interest building up.

Related

• Which ITR form should you file?
• Old vs new tax regime
• Tax glossary