CA Ashama Rajawat - Expert Tax Planning for NRIs & Global Professionals

What is Advance Tax?

Advance tax is the income tax paid in installments during the financial year instead of paying a lump sum at year-end. It's also known as "pay-as-you-earn" tax.

Who Needs to Pay Advance Tax?

Threshold and applicability criteria

If your total tax liability for the year exceeds ₹10,000 after TDS, you must pay advance tax.

Applicable to:

Salaried individuals with additional income
Freelancers and consultants
Business owners and professionals
Investors with capital gains
Anyone with income from house property

Advance Tax Payment Dates FY 2025-26

Mark these critical dates in your calendar to avoid interest penalties

First Installment

June 15, 2025

15%

of tax liability

Second Installment

Sept 15, 2025

45%

cumulative

(Pay additional 30%)

Third Installment

Dec 15, 2025

75%

cumulative

(Pay additional 30%)

Final Installment

Mar 15, 2026

100%

complete

(Pay remaining 25%)

Important Reminder

Missing any installment deadline attracts 1% interest per month under Section 234C. Plan ahead!

How to Calculate Advance Tax

Step-by-Step Calculation

Follow these steps to calculate your advance tax liability

Estimate Annual Income

Calculate total income from all sources: salary, business, capital gains, etc.

Calculate Tax Liability

Apply tax rates as per your chosen regime (old/new)

Deduct TDS/TCS

Subtract tax already deducted at source

Calculate Installments

Apply percentages: 15%, 45%, 75%, 100%

Example Calculation

Real-world calculation scenario

Estimated Annual Income:₹15,00,000

Tax Liability (New Regime):₹1,87,500

Less: TDS from Salary:- ₹50,000

Net Tax Payable:₹1,37,500

Installment Schedule:

• June 15:

₹20,625 (15%)

• Sept 15:

₹41,250 (30% more)

• Dec 15:

₹41,250 (30% more)

• March 15:

₹34,375 (25% balance)

How to Pay Advance Tax Online

Step 1: Visit Income Tax Portal

Go to https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

Step 2: Select Challan Type

Choose Challan 280 for advance tax payment

Step 3: Fill Details

Enter PAN, assessment year, address, and tax amount

Step 4: Payment Mode

Pay via net banking, debit card, or UPI

Step 5: Save Receipt

Download and save BSR Code receipt for ITR filing

Penalty for Non-Payment

Interest Under Section 234B & 234C

Penalties for late or missed payments

Section 234B

1% per month on unpaid tax from April 1 to date of payment

Section 234C

1% per month for shortfall in each installment

Note: Interest is calculated for every month or part of month. Even a 1-day delay counts as a full month.

Important Points to Remember

✓Senior citizens (60+ years) with no business income are exempt from advance tax
✓Advance tax can be paid in lump sum before March 31 instead of installments
✓Revise estimates if income increases/decreases during the year
✓Save all payment receipts for ITR verification

Use Our Income Tax Calculator

Not sure how much advance tax to pay? Use our free income tax calculator to estimate your tax liability for FY 2025-26.

Conclusion

Paying advance tax on time helps avoid penalties and ensures smooth tax compliance. Plan your cash flows to meet advance tax deadlines, and always maintain records of payments for future reference.

Advance Tax Payment Guide 2025: Complete Guide with Calculation