< >

Home > Income Tax > Help Center > Advance Tax Last Updated: Feb 21st 2023

Advance Tax: What, When & How to Pay?

Advance Tax is a form of Income Tax which is payable in installments instead of Lumpsum Payment at the year end and should be made before the due dates specified by Income Tax Department. It is an obligation to pay advance tax whoever needs to pay such.

Know more about the Advance Tax, Due Dates, Installments, Exceptions, Calculation, Consequences for Non-Payment, Non-Applicability of Interest u/s 234C

What is Advance Tax?
Advance Tax: What, When & How to Pay

Advance Tax is required to be paid if the estimated tax liability is more than Rs 10,000 in a year.

1. Due Dates and Installments of Advance Tax?

The Advance Tax payment schedule for both the companies and Non-Companies (except for 44AD and 44ADA) are as follows

S.NoDue Date of InstallmentAmount of Installment
1On or before 15 th June15% of Tax Liability
2On or before 15th September45% of Tax Liability
3On or before 15th December75% of Tax Liability
4On or before 15th March100% of Tax Liability

2. Exceptions for Payment of Advance Tax?

In order to reduce genuine compliance hardship, some exceptions are provided regarding payment of advance tax

  • Senior Citizens (60 years or more) are not required to pay advance tax if their income does not consist of Business or Profession Income. Senior citizens are allowed to discharge their liability in form of self-assessment tax
  • The Taxpayers following 44AD and 44ADA are required to pay the advance tax only in 1 installment i.e., 15th March of the financial year
Any Amount paid by way of advance tax on or before March 31st is also treated as advance tax paid during the financial year.

3. How to compute Advance Tax?

  1. Compute (Estimate) Total Income for the whole year including Salary, rental income, interest, profits from business, capital gains etc.
  2. Compute the Deductions available u/s Chapter VIA and other relevant sections and arrive at the Net Taxable Income
  3. Compute the Tax Liability on Net Taxable Income and Deduct the TDS or any relief available u/s 89 or 90 / 90A / 91.
  4. If the Final Tax Liability is more than Rs 10,000 the taxpayer is required to pay Advance tax at specified intervals.

4. How to pay Advance Tax?

Visit How to pay Income Tax due Online in India? to get the detailed instructions.

Make sure you select Type of Payment: (100) ADVANCE TAX.

If the amount paid as advance tax is higher than the total tax liability, the assesse will receive the excess amount as a refund. Interest @ 6% per annum will be paid by the Income Tax department to the assesse on the excess amount if the amount is more than 10% of tax liability.

5. Consequences for Non-Payment of Advance Tax

Interest u/s 234B and 234C are charged if the advance tax is not paid by the taxpayer at specified due dates

  • Interest u/s 234B: If the Advance Tax paid before March 31 is less tan 90% of Total Tax, Interest u/s 234B will be levied @ 1% per month from the next month i.e., April
  • Interest u/s 234C: If the Taxpayer does not paid the advance taxes @ 15% / 45% / 75% / 100% on or before due dates, then the interest u/s 234C will be levied @ 1% per month

6. Non-Applicability of Interest u/s 234C

Interest u/s 234C is not levied in the following cases if the income consists of following incomes

  1. Capital Gains. Know more @ Capital Gains, a Complete Guide
  2. Winnings from lotteries or Puzzles
  3. Profits and gains from Business or Profession if the Income arises for first time

Know more on TDS, TCS, Advance, Self assessment Tax Frequently asked questions

How to get help from

Our Tax Services

Online Income Tax Filing Time: ~7 mins
  • Comprehensive & Accurate > No limits.
  • Highly Secure > Peace of mind.
  • Maximum Deductions > Save on Taxes.
  • No more visits to Tax Consultants > Save Time & Money.
  • Real-time Tax Calculation
  • Available in both Web Browser & Mobile App

Start Now

GST Accounting Software Price: Free for 30 days in India  refer pricing for other countries such as India, Australia, Malaysia, Nepal, Pakistan, Singapore, Sri Lanka, & UK

Easiest GST ready Accounting software

  • GST Compliant Invoicing
  • Online - Highly available
  • Quick Onboarding - Import your data from legacy
  • Personalization - Highly customized Invoicing
  • Drafts > Estimates > POs > Delivery Challans > Invoices > CR/DR Notes > RCs & All.
  • Barcode scanner Integration
  • Amazon, Flipkart Imports
  • Individual, or Bulk Payments - just a Click away
  • Multiple users can Book / Bill at the same time
  • Quick Invoicing, Auto Delivery, & Reminders
  • Multi-Channel GST returns preparation
  • Customized for Regular and Composition
  • AI Data Insights
  • AI Prioritization
  • AI Alerts
  • Expenses & Purchases
  • Real Time P & L
  • Barcode Scanner, e-Way Bill Integration
  • Excellent User Experience
  • Easy to understand language
  • Artificial Intelligence enablement
  • above all, Count on our Outstanding Client Service

Start NowLearn more
Tax Expert Services Price: Rs.799 onwards

  • Affordable Tax Services for Businesses, Associations, Individuals
  • GST Registration
  • GST Return Filing
  • GST Accounting
  • GST Consultation
  • Notice Handling
Income Tax
  • Income Tax Return Filing for Businesses, Associations, Individuals
  • Tax Savings
  • TDS Preparation
  • General Tax Compliance
  • Investment Advisory
  • Capital Gains Consultation
  • Tax Planning
  • Notice Handling
Virtual Accounting
  • Complete Accounting for Businesses, Associations, Individuals
  • Compliance & Accounting Portal Access for easy monitoring
  • Accounting Advisory
  • Tax Savings
  • GST, Income Tax, TDS, General Tax Compliance
  • Business Planning

Contact Now   WhatsApp Now