Advance Tax Payment 2025: Deadlines, Who Must Pay, Simple Calculator & How to Avoid Penalties

Why advance tax matters (short answer)

Advance tax spreads your tax payment across the year so the government gets tax receipts on time and you avoid interest for late payment. If you don’t pay enough advance tax, the tax department can charge interest under Sections 234B and 234C.

Advance tax due dates for FY 2025–26 (what to remember)

Who must pay advance tax?

• Individuals, HUFs, companies, firms and others whose tax liability after TDS/TCS is more than ₹10,000 in a financial year.
• Persons with significant non-salary income (freelancers, professionals, capital gains, rent, business income).
• If you have only salary income and employer deducts adequate TDS, you usually do not need to pay advance tax separately — but if you have non-salary sources you likely will.

How to calculate your advance tax: step-by-step

1. Estimate your total income for the financial year (salary + business/professional income + capital gains + other sources).
2. Apply deductions (80C, 80D, standard deduction, etc.) and compute taxable income.
3. Compute gross tax liability using applicable tax slabs (old or new regime) and add cess and surcharge if applicable.
4. Subtract TDS/TCS already deducted and any pre-paid taxes — remaining is advance tax payable.
5. Pay instalments according to the schedule above (15% by 15 Jun, 45% by 15 Sept, etc.).

Quick worked example:
Estimated taxable income = ₹18,00,000. Estimated tax = ₹1,50,000. TDS already deducted = ₹60,000. Advance tax required = ₹90,000.
Installments (approx): 15% → ₹13,500 by 15 Jun; cumulative 45% → ₹40,500 by 15 Sep (i.e., pay additional ₹27,000); 75% → ₹67,500 by 15 Dec; 100% → ₹90,000 by 15 Mar.

Interest & penalties: what happens if you underpay or delay

If you delay or underpay advance tax, two sections commonly apply:

Section 234C

Interest at 1% per month or part of a month is charged on the shortfall for each delayed instalment. It is a quarterly interest computed on the instalment shortfall.

Section 234B

If you have paid less than 90% of total tax liability by the end of the year (31 March), interest at 1% per month is charged on the remaining unpaid tax from 1 April till the date of actual payment.

Tip: Even small shortfalls can trigger interest; if in doubt, slightly overpay and adjust at year-end.

How to pay advance tax (online)

1. Go to the Income Tax e-filing portal / official tax payment page (or your bank’s challan service).
2. Choose Challan No. ITNS 280 — Payment type: Advance Tax.
3. Fill PAN, Assessment Year (e.g., AY 2026–27 for FY 2025–26) and bank details, and make the payment.

Always keep the challan receipt / UTR for records and reconciliation with your final ITR. See the Income Tax Department FAQ for details.

Smart tips to avoid surprise interest

• Update estimates quarterly: If your income rises mid-year (bonus, capital gain), recompute and pay the extra advance tax immediately.
• Use TDS where possible: Ask clients/employers for higher TDS if you expect large non-salary income.
• Pay capital gains tax promptly: Capital gains often trigger large tax bills; plan instalments accordingly.
• When in doubt, pay more: Overpay slightly and claim refund when filing ITR.

Common FAQs

Q. I am salaried but have freelancing income — do I need to pay advance tax?

A. Yes — if post-TDS tax liability exceeds ₹10,000, you must pay advance tax for the non-salary component to avoid interest.

Q. What if I miss the 15 September instalment but pay more later?

A. You may have to pay interest under Section 234C for the shortfall. Additionally, if your total advance tax + TDS is <90% by 31 March, 234B interest can apply.

Q. Where can I find the official calendar/dates?

A. Refer to the Income Tax Department’s official deadlines & tax calendar for the latest notifications.

Final checklist before you pay

• Estimate income & tax under the regime you’ll use (old vs new).
• Account for TDS/TCS already deducted.
• Pay instalments by the due dates (15 Jun / 15 Sep / 15 Dec / 15 Mar).
• Keep challan receipts and reconcile with Form 26AS/Annual Information Statement later.

Official Income Tax Portal

This article summarizes current rules and commonly used calculations. For complex cases (business profits, international taxation, or unusual deductions) consult your CA or tax professional.