Advance tax is income tax you pay during the year, in instalments, instead of in one go when you file your return; it applies when the year's tax, net of TDS and TCS, is ₹10,000 or more. Most people pay 15% by 15 June, 45% by 15 September, 75% by 15 December and the full amount by 15 March.
It catches income that has no tax cut at source or too little: business and professional profits, rent, capital gains, interest and freelance fees. Salaried people with only salary rarely owe it, because the employer's TDS covers them. This hub sets out the rules for FY 2025-26 and tax year 2026-27, gives a planner to split your tax, and links the detailed pages.
Quick facts
Who pays
Anyone whose tax after TDS and TCS is ₹10,000 or moreInstalments
15%, 45%, 75%, 100% by 15 June, 15 September, 15 December, 15 March44AD or 44ADA
Whole amount by 15 MarchExempt
Resident senior citizens (60+) with no business or professional incomePaid through
e-Pay Tax, advance tax (minor head 100)Interest for shortfall
234B and 234C, 1% a monthSection (1961 Act)
Sections 207 to 211
Advance tax pages in this group
| Page | What it answers |
|---|---|
| Advance tax due dates | Each instalment date and percentage, the single date for presumptive cases, gains that arise late in the year |
| Pay advance tax online | Step by step e-Pay Tax, challan details, payment modes and fixing a wrong challan |
| Interest 234A, 234B, 234C | How the three interest charges are worked out when tax is short or late |
Advance tax meaning and applicability
The law calls it pay as you earn. Under sections 207 to 211 of the 1961 Act, tax on income of a year is payable during that same year, in advance of the return. Section 208 sets the ₹10,000 trigger: if tax on your estimated total income, less TDS and TCS, is ₹10,000 or more, you must pay advance tax.
The duty applies to individuals, HUFs, firms, companies and every other kind of taxpayer. The one exception, in section 207, is a resident individual aged 60 or more at any time in the year who has no income from business or profession. A retired person living on pension, rent and deposit interest falls in this exempt group, and pays any balance as self-assessment tax when filing.
Advance tax instalments at a glance
| Pay by | Normal taxpayers: cumulative share | Presumptive income under 44AD or 44ADA |
|---|---|---|
| 15 June | At least 15% | Nil |
| 15 September | At least 45% | Nil |
| 15 December | At least 75% | Nil |
| 15 March | 100% | 100% |
The percentages are of your estimated tax for the year, net of TDS. Each date is a running total, not a separate slice: by 15 September you should have paid 45% in all, including the June amount. Details and the rules for late arising gains are on advance tax due dates.
How to calculate advance tax
Work it out each quarter, because estimates change:
- Estimate total income for the year from every head: salary, house property, business, capital gains, other sources.
- Subtract deductions you are sure of, if you are in the old regime.
- Work out tax at the slab rates, add surcharge if any, and add 4% cess. Apply the 87A rebate if your income qualifies.
- Subtract TDS and TCS you expect for the year.
- If the balance is ₹10,000 or more, pay the instalment shares above.
A shop owner expects taxable business income of ₹18,00,000 for the year in the new regime. Tax: ₹20,000 (4 to 8 lakh) + ₹40,000 (8 to 12 lakh) + ₹60,000 (12 to 16 lakh) + ₹40,000 (16 to 18 lakh at 20%) = ₹1,60,000. Cess 4%: ₹6,400. Total ₹1,66,400.
TDS deducted by customers: ₹16,400. Net advance tax: ₹1,50,000.
Instalments: ₹22,500 by 15 June (15%), ₹45,000 by 15 September (to reach ₹67,500), ₹45,000 by 15 December (to reach ₹1,12,500) and ₹37,500 by 15 March (to reach ₹1,50,000).
Using the advance tax planner
The planner on this page does the split for you. Enter your estimated tax for the year and the TDS you expect. It subtracts the TDS, tells you whether the ₹10,000 limit is crossed, and lists the amount due by each of the four dates, both as a running total and as the amount to pay on that date. It runs in your browser; your entries are not sent anywhere or saved. Re-run it before each date if your income estimate changes, and pay any extra in the next instalment.
Advance tax rules for salaried people and investors
Salaried employees can still owe advance tax when they have other income the employer does not know about: rent, interest above the TDS covered amount, dividends, or capital gains from shares and mutual funds. You can declare this income to your employer so that it raises monthly TDS. That avoids instalments altogether.
Capital gains, lottery winnings and similar income that arise after an instalment date cannot be foreseen. If the tax on them is paid in the remaining instalments, or by 15 March if the gain comes after 15 December, no 234C interest arises for the earlier dates.
Advance tax section under the Income-tax Act, 2025
| FY 2025-26 (1961 Act) | Tax year 2026-27 (2025 Act) |
|---|---|
| Sections 207 to 211, interest under 234B and 234C | Same scheme carried into the new Act, under new section numbers |
| Challan for AY 2026-27 on e-Pay Tax | Select the Income-tax Act, 2025 and tax year 2026-27 on e-Pay Tax |
| ₹10,000 limit, senior citizen exemption | Unchanged |
| Four dates: 15 June, 15 September, 15 December, 15 March | Unchanged |
Today the open year is tax year 2026-27, so its next date is 15 December, at 75%. Any shortfall for FY 2025-26 is now settled as self-assessment tax with interest. Read the Income Tax Act, 2025 hub for the wider change.
Advance tax mistakes and fixes
| Mistake | Fix |
|---|---|
| Ignoring TDS when estimating | Subtract expected TDS first; you may be under ₹10,000 |
| Paying the June share and stopping | Each date is cumulative; top up to 45%, 75% and 100% |
| Selecting self-assessment tax instead of advance tax on the challan | Use advance tax (100) for payments before 31 March |
| A senior citizen with a small shop assuming exemption | The exemption ends once there is any business income |
| Paying under the wrong year | Choose AY 2026-27 for FY 2025-26 income, tax year 2026-27 for income from 1 April 2026 |
Information here is general and may not fit your own facts. Because rules can shift between years, check your figures on the department's portal or with a chartered accountant ahead of each payment.
Sources we checked
- Income-tax Act, 1961, sections 207 to 211
- Income-tax Act, 1961, sections 234B and 234C
- Income-tax Act, 2025
- e-Filing portal help: e-Pay Tax
Frequently asked questions
What is advance tax?
It is income tax paid in instalments during the year in which you earn the income, instead of in one lump sum at the time of filing. It becomes payable once your tax, net of TDS, reaches ₹10,000.
Who is not required to pay advance tax?
Resident individuals aged 60 or more who have no business or professional income. Anyone whose tax after TDS and TCS is under ₹10,000 also need not pay.
Which advance tax section applies?
Under the 1961 Act, sections 207 to 211 set out the liability, the calculation and the instalments, with interest in 234B and 234C. The 2025 Act keeps the same scheme for tax year 2026-27 under new numbers.
Do salaried employees pay advance tax?
Only if they have other income with little or no TDS, such as rent or capital gains, and the extra tax is ₹10,000 or more. Declaring that income to the employer can push it into salary TDS instead.
What if I overpay advance tax?
The excess is refunded after your return is processed, with interest where the law allows it. Keep the challan details to enter in your return.