Advance Tax Payment Under explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Advance tax is income tax paid in instalments during the Tax Year rather than as a lump sum at year-end. Under ITA 2025, any taxpayer whose estimated tax liability for the Tax Year exceeds Rs. 10,000 (after TDS credit) must pay advance tax. This prevents large end-of-year tax payments and associated interest.
Who Must Pay Advance Tax?
- Individuals, HUFs, firms, LLPs, companies with estimated tax liability > Rs. 10,000
- Resident senior citizens (60+) are exempt from advance tax if they have no income from business/profession
- Presumptive taxation (44AD/44ADA) taxpayers: single instalment by 15 March
Advance Tax Instalment Schedule
| Instalment | Due Date | Cumulative % of Tax Payable |
|---|---|---|
| 1st Instalment | 15 June | At least 15% |
| 2nd Instalment | 15 September | At least 45% |
| 3rd Instalment | 15 December | At least 75% |
| 4th Instalment | 15 March | 100% |
Computation of Advance Tax
- Estimate total income for the Tax Year
- Compute tax at applicable rates (including surcharge + cess)
- Deduct expected TDS for the year
- = Net advance tax liability
- Pay as per instalment schedule above
Interest for Short Payment / Default
Section 234B — Non/Short Payment of Advance Tax
If advance tax paid by 31 March is less than 90% of assessed tax, interest @ 1% per month applies on the shortfall from 1 April to date of actual payment. Calculated on rounded amount.
Section 234C — Deferment of Instalments
If any specific instalment is short-paid:
- For 15 June shortfall: 1% per month for 3 months on 15% of tax
- For 15 September shortfall: 1% per month for 3 months
- For 15 December shortfall: 1% per month for 3 months
- For 15 March shortfall: 1% per month for 1 month
Challan for Advance Tax
Advance tax is paid via ITNS 280 challan, selecting the appropriate tax year and code (100 = advance tax). Payment can be made online through the Income Tax e-filing portal or bank branches.
Advance Tax for Capital Gains and Windfalls
Capital gains arising after 15 December are required to be paid as a single instalment with the 15 March instalment — no penalty for treating them as single-instalment. VDA income, lottery income, and unexpected gains should be included in the remaining instalment.
Self-Assessment Tax
If any tax remains unpaid after 31 March (after advance tax and TDS), it becomes self-assessment tax, payable before filing ITR. Interest under 234A (late filing) and 234B applies.
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Key Facts About Advance Tax Payment Under
- Applies in: All states across India, under the relevant central law.
- Mode: Mostly online via the official government portal.
- Typical timeline: Ranges from a few days to a few weeks depending on the case.
- Non-compliance: May attract penalties, interest or late fees.
- Expert help: TaxClue completes the entire process end to end for you.
Who is exempt from advance tax under ITA 2025?
Resident senior citizens (60 years+) with no business/profession income are fully exempt from advance tax obligations.
What is the advance tax due date schedule?
15 June (15%), 15 September (45%), 15 December (75%), 15 March (100%) of estimated tax liability.
Over 90% of compliance penalties in India arise from missed due dates — timely handling can save businesses thousands of rupees each year.
Advance Tax Payment Under: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.
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Why This Matters
Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly. Rules and thresholds in income tax are revised periodically, so it helps to review your obligations at the start of each financial year. Professional guidance from a qualified CA, CS or advocate ensures that filings are accurate and submitted well before the due date.
Small businesses and startups especially benefit from setting up a simple compliance calendar to track recurring deadlines. Government portals now allow most applications and filings to be completed online, reducing paperwork and turnaround time. Keeping your PAN, registration certificates and board resolutions organised makes every subsequent filing faster. When in doubt, it is better to seek clarification early rather than risk a notice or a late-filing penalty later.