Who has to pay advance tax
Anyone whose tax for the year comes to ₹10,000 or more, after credit for TDS and TCS. The department's own guidance puts the test simply: advance tax applies where the estimated tax liability for the financial year is ₹10,000 or more. Section 404 of the Income-tax Act, 2025 carries the same figure for Tax Year 2026-27 onwards.
The point people miss is that it is not a business tax. It applies to every kind of income, and the reason a salaried person usually escapes it is that TDS on salary already covers the liability, not that salary is outside the rule.
| You are | Usual position |
|---|---|
| Salaried, with no other income | Normally covered by TDS on salary, so nothing to pay. See ITR filing for salaried employees |
| Salaried, with rent, interest, dividends, capital gains or freelance income | Advance tax is likely, because TDS on those is either lower than your slab rate or not deducted at all |
| A freelancer or consultant | Yes, and you carry the estimate yourself. See ITR filing for freelancers |
| In business, or a partner in a firm | Yes |
| A trader in futures and options | Yes, and the volatility makes the estimate the hard part |
| Earning rental income above the TDS threshold | Usually yes, because rental TDS rarely matches the slab rate |
| A resident senior citizen with no business or professional income | Exempt, see below |
The four instalments
Four dates, four cumulative percentages. Each instalment is a percentage of the whole year's advance tax, not a quarter of it, and each one is reduced by what you have already paid.
| Due date | Amount payable, cumulative |
|---|---|
| On or before 15 June | 15% of advance tax |
| On or before 15 September | 45% of advance tax |
| On or before 15 December | 75% of advance tax |
| On or before 15 March | 100% of advance tax |
One useful rule sits behind these dates: any tax paid on or before 31 March is also treated as advance tax paid during the financial year. That does not protect you from interest for missing an earlier instalment, but it does mean a March payment still counts as advance tax rather than self-assessment tax.
The same four dates and percentages apply for Tax Year 2026-27 onwards under section 408 of the Income-tax Act, 2025.
Presumptive taxpayers pay once
If you declare income on a presumptive basis, you pay the whole amount of advance tax in a single instalment on or before 15 March. The 1961 Act allows this for an eligible assessee under the presumptive provisions, and section 408(2) of the 2025 Act carries it forward in the same terms.
That is a real simplification, and it is also a trap: one missed date costs the whole year's interest rather than a quarter of it. For the presumptive scheme itself, see ITR filing for business.
Who does not have to pay
| Who | Position |
|---|---|
| Anyone whose tax for the year is below ₹10,000 | No advance tax |
| A resident senior citizen, aged 60 or above, with no income from business or profession | Exempt from paying advance tax |
| Someone whose TDS and TCS credits already cover the liability | Nothing left to pay, because advance tax is computed after those credits |
The senior citizen exemption has three conditions and all three must hold: resident, aged 60 or above, and no business or professional income. A retired person with pension, interest and rent is inside the exemption. A retired person running a consultancy is not, and that is a common and expensive misreading. The department's guidance states the exemption for senior citizens without business or professional income.
This page states that exemption for FY 2025-26 under the Income-tax Act, 1961. We confirm the position under the Income-tax Act, 2025 before relying on it for Tax Year 2026-27, because the exemption is not stated on the section we have verified for that Act.
How the instalment is worked out
In five steps, and the hard part is the first one.
- Estimate the year's total income. All heads: salary, business or professional income, house property, capital gains realised so far, interest, dividends and anything else.
- Compute the tax on it, under the regime you will use, with surcharge and cess.
- Deduct the reliefs and credits you are entitled to, including foreign tax credit where it applies.
- Deduct the TDS and TCS that has been or will be deducted for the year. Form 26AS and the AIS show what has already been reported. If you deduct TDS yourself, see TDS return filing.
- Apply the percentage for the date you are at, and subtract what you have already paid.
A worked example
A consultant expects total income of ₹18,00,000 for the year. Tax, surcharge and cess on it work out to ₹2,40,000, and clients will deduct ₹90,000 of TDS across the year. Advance tax for the year is ₹1,50,000.
| Due date | Cumulative percentage | Cumulative amount | Payable on that date |
|---|---|---|---|
| 15 June | 15% | ₹22,500 | ₹22,500 |
| 15 September | 45% | ₹67,500 | ₹45,000 |
| 15 December | 75% | ₹1,12,500 | ₹45,000 |
| 15 March | 100% | ₹1,50,000 | ₹37,500 |
The estimate will move during the year, and that is normal. What matters is that you revise it at each date rather than paying the June figure four times. A client who leaves in August and one who signs in November both change the answer.
Interest when you get it wrong
Two separate interest charges, both at 1% a month, and both paid to the department rather than to us. They can apply together.
| Charge | What triggers it | Rate |
|---|---|---|
| Section 234B | You paid no advance tax, or paid less than 90% of the assessed tax | 1% for every month or part of a month, from 1 April following the year until the tax is determined or the assessment is completed |
| Section 234C | You paid an instalment late or short, measured against the 15%, 45%, 75% and 100% marks | 1% a month on the shortfall for the relevant period |
Section 234B, the 90% test
This is the annual test. If the advance tax you paid is less than 90% of the assessed tax, interest runs at 1% a month from 1 April of the following year until the income is determined or the regular assessment is completed. Section 424 of the Income-tax Act, 2025 carries the same 90% test and the same 1% rate for Tax Year 2026-27 onwards.
Ninety percent is not a generous margin on a volatile income, and it is measured on the year as a whole, so a December windfall can break it even if every earlier instalment was right.
Section 234C, the instalment shortfall
This is the instalment test, and it is charged date by date. Under section 425 of the Income-tax Act, 2025 the structure is visible in the section itself: a shortfall in any of the first three instalments carries 3%, being 1% a month for three months, and a shortfall in the last instalment carries 1%.
So the March instalment is the cheapest one to be short on and the June instalment the most expensive, which is the opposite of how most people treat them.
The capital gains relief people lose by waiting
There is a specific relief for income you could not have forecast, and it is conditional. Where a shortfall in an instalment is attributable to capital gains, no interest is charged under section 234C, provided you pay the whole tax on that income in the remaining instalments falling due after the gain arises, or, where no instalment is left, before the end of the financial year.
Read that condition twice, because it is where the relief is lost.
| When the gain arises | What you must do to keep the relief |
|---|---|
| In July | Pay the tax on it with the 15 September instalment |
| In January | Pay the tax on it with the 15 March instalment |
| In late March, after the last instalment | Pay it before 31 March |
The relief covers section 234C only. Interest under section 234B is not covered, so a large late gain still needs the 90% annual test met. For the computation of the gain itself, see capital gains ITR filing.
How to pay advance tax
Through e-Pay Tax on the income tax portal, choosing advance tax as the type of payment and the correct year. The department's guidance also allows payment offline at authorised banks, using Challan ITNS 280 for periods governed by the 1961 Act.
Four things to get right, because a payment made under the wrong head is a refund claim rather than a credit.
- The right year. A payment tagged to the wrong year does not show against the liability you meant it for.
- The right head. Advance tax, not self-assessment tax.
- The right PAN. Your own, and for a firm or company, the entity's.
- The challan saved. The challan identification number is what goes in the return.
Some payment modes carry bank or payment gateway charges, which you bear. There is no government fee for the payment itself.
What happens if you pay too much
You get it back with interest. An overpayment becomes a refund when the return is filed, and a refund out of advance tax carries interest under section 244A at 0.5% a month, running from 1 April of the assessment year where the return was filed by the due date.
One limit: no interest is payable if the refund is less than 10% of the tax as determined. So a small overpayment is returned without interest, and a large one is not free money either, since 0.5% a month is below what the same cash would earn elsewhere. Aim to be accurate, not conservative. If a refund does not arrive, see income tax refund.
Government fee and our fee
There is no government fee to pay advance tax. You pay the tax itself, and any interest that has arisen.
| Fee | Amount |
|---|---|
| Regikart professional fee, advance tax computation per instalment | Fee on quote after a free review |
| Regikart professional fee, advance tax managed across all four dates | Fee on quote after a free review |
| Government fee to pay advance tax | No government fee |
| Return filing at the end of the year | From ₹999, see income tax return filing |
Professional fees exclude GST at 18%. Government fees, where they apply, are paid at actuals to the department and are shown separately. Fees verified on 27 September 2026.
Advance tax work is quoted after a review because a salaried person with one capital gain and a trading business with monthly figures need different amounts of work. Interest under sections 234B and 234C is paid by you to the department and is not part of our fee.
How we run advance tax through the year
- Build the estimate in April or May. Last year's return, this year's contracts, salary structure and any planned sale. Where your books drive the estimate, see accounting services.
- Credit the TDS. Form 26AS and the AIS, downloaded with your consent, so you are not paying tax twice.
- Compute and remind, four times. Before each date, with the revised estimate and the amount to pay.
- Handle the one-off events. A property sale, an ESOP sale, a large bonus or a windfall, each of which changes the instalment and, in the case of a capital gain, brings the section 234C relief into play.
- Close the loop at filing. The challans, the credits and the computation reconciled, so the return matches what was paid. For the return itself, see income tax return filing.
What we need from you
| Item | Why |
|---|---|
| Last year's return and computation | The fastest reliable starting point for the estimate |
| Income figures for the year so far | Invoices raised, salary slips, rent received, interest credited |
| Expected income for the rest of the year | Contracts, retainers, planned sales |
| Details of any capital gain already realised | The instalment changes, and the section 234C relief has a deadline |
| Form 26AS and the AIS | Downloaded with your consent, to credit TDS and TCS |
| Regime choice and deduction details | The tax on the estimate depends on both |
| Challans for instalments already paid | To compute the next one and check the tagging |
Income-tax Act, 1961 and Income-tax Act, 2025
For FY 2025-26 the Income-tax Act, 1961 applies: liability under sections 207 and 208, instalments under section 211, and interest under sections 234B and 234C.
For Tax Year 2026-27 onwards the Income-tax Act, 2025 applies, and the machinery is the same with new numbers: liability to pay advance tax where the tax payable is ₹10,000 or more under section 404, the four instalments and due dates under section 408 with the single 15 March instalment for presumptive cases under section 408(2), interest for default under section 424 and interest for deferment under section 425.
Where a figure has not changed between the two Acts, this page says so. Where we have not verified the 2025 Act position, such as the senior citizen exemption, the page says that too rather than assuming it carries over.
Why Regikart for advance tax
Regikart is a CA and CS firm serving 250+ clients from offices in Kolkata (head office), Delhi and Bengaluru. Advance tax is computed and reviewed by a Chartered Accountant.
- We revise the estimate at each date. Paying the June figure four times is how people end up on the wrong side of the 90% test.
- We use the capital gains relief properly. It is conditional and time-bound, and it is lost by waiting until the return is prepared.
- We credit the TDS first. Advance tax is what is left after credits, and overpaying is a cash cost with 0.5% a month against it.
- We keep the challans reconciled. The return at the end of the year agrees with what was paid, which is what keeps the intimation clean.
- The same team afterwards. Income tax return filing at the end of the year, income tax notice reply if a query arrives, and tax planning before the next year starts.