It is essential for freelancers, business owners, landlords and investors with capital gains, whose tax is not fully covered by TDS.
Advance tax instalments
15% by 15 June · 45% by 15 September · 75% by 15 December · 100% by 15 March
- Net tax
- Tax on estimated income minus TDS and TCS
- Threshold
- Advance tax applies when net tax is ₹10,000 or more
- Presumptive
- 100% in one instalment by 15 March
- Interest
- 1% a month on shortfalls (old sections 234B and 234C)
Percentages are cumulative: by 15 September you should have paid 45% of your annual tax in total, including the June instalment.
If you miss instalments, simple interest at 1% a month applies on the shortfall for each period, plus 1% a month from April until you pay if less than 90% was paid by 31 March. Resident senior citizens without business income are exempt.
How to pay advance tax
Advance tax is paid online through the income tax e-filing portal.
- Use challan ITNS 280 (minor head 100 for advance tax) on the e-pay tax service.
- Keep the challan receipt; it is shown in Form 26AS and your AIS.
- Re-estimate your income before each due date, especially after large gains.
- Capital gains or windfalls after a due date only need tax in the remaining instalments.