adminAdvance tax is “pay as you earn.” Instead of paying all your tax at year-end, the law expects you to pay it in instalments through the year. Miss the dates and interest piles up. Here is who must pay, the schedule, and how to stay penalty-free.
Who has to pay advance tax?
Anyone — salaried, freelancer, business owner or investor — whose total tax liability for the year, after reducing TDS, is ₹10,000 or more must pay advance tax. Resident senior citizens (aged 60+) with no income from business or profession are exempt.
Salaried employees usually have tax deducted at source, but advance tax can still apply if you have extra income such as interest, rent, capital gains or freelance earnings on which enough TDS was not deducted.
Advance tax due dates (FY 2025-26)
| Due date | Cumulative advance tax payable |
|---|---|
| 15 June 2025 | 15% of total tax |
| 15 September 2025 | 45% of total tax |
| 15 December 2025 | 75% of total tax |
| 15 March 2026 | 100% of total tax |
Taxpayers under the presumptive scheme (Sections 44AD/44ADA) can pay their entire advance tax in a single instalment by 15 March 2026.
What happens if you miss it?
Two interest charges apply, both at 1% per month:
- Section 234C — for missing or short-paying an instalment by its due date.
- Section 234B — if you pay less than 90% of your total tax as advance tax by year-end.
You can pay advance tax online through the Income Tax e-filing portal (e-Pay Tax) using Challan 280. Keep the challan for your records and reconcile it against Form 26AS.
MoreofTax can compute and schedule your advance tax so you never pay interest. Call +91 96575 53795 or use our Income Tax Calculator to estimate your liability.
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Frequently Asked Questions
Do salaried employees need to pay advance tax?
Usually their employer’s TDS covers it. But if you have other income (interest, capital gains, rent, freelancing) and your remaining tax after TDS is ₹10,000 or more, you must pay advance tax on it.
What is the penalty for missing advance tax?
Interest at 1% per month under Sections 234B and 234C on the shortfall. There is no separate penalty, but the interest adds up the longer it stays unpaid.
Can I pay all my advance tax at once?
Presumptive taxpayers under 44AD/44ADA can pay 100% by 15 March. Others should follow the four-instalment schedule to avoid Section 234C interest.