Advance Tax Payment — Due Dates, How to Pay & Interest Penalty
Updated: 3 June 2026 | Income-tax Act 2025 | Challan 280
Advance tax mandatory if tax liability > ₹10,000 after TDS. Installments: 15% by June 15, 45% by Sep 15, 75% by Dec 15, 100% by Mar 15. Pay online via Challan 280 at incometax.gov.in. Interest penalty under Section 234B/234C for shortfall — 1% per month.
₹10,000
Threshold — advance tax required if estimated tax liability exceeds ₹10,000 after TDS deductions.
Senior citizens (60+) with no business income: exempt. Presumptive taxpayers: 100% by March 15 only. Use Challan 280 — select "Advance Tax."
Senior citizens (60+) with no business income: exempt. Presumptive taxpayers: 100% by March 15 only. Use Challan 280 — select "Advance Tax."
Advance Tax Installment Schedule
| Installment | Due Date | Cumulative % | Pay This Installment |
|---|---|---|---|
| 1st installment | June 15 | 15% | 15% of estimated tax |
| 2nd installment | September 15 | 45% | 30% of estimated tax |
| 3rd installment | December 15 | 75% | 30% of estimated tax |
| 4th installment | March 15 | 100% | 25% of estimated tax |
| Presumptive (44AD/44ADA) | March 15 only | 100% | Full advance tax in one shot |
Frequently Asked Questions
Who is required to pay advance tax?
Advance tax is mandatory for any taxpayer whose estimated tax liability for the year exceeds ₹10,000 after deducting TDS. This applies to: Salaried employees (if TDS by employer is insufficient to cover full liability). Business owners and self-employed. Freelancers and professionals. Investors with capital gains, rental income, dividend. Exceptions from advance tax: Senior citizens (age 60+) who have NO income from business/profession — exempt from advance tax (only applicable for income from salary, rent, interest). Presumptive scheme taxpayers (Section 44AD/44ADA): pay 100% advance tax by March 15 (single installment).
What are the advance tax due dates and installment percentages?
Advance tax installment schedule: June 15: 15% of estimated annual tax. September 15: 45% of estimated annual tax (cumulative — so pay 30% more by this date). December 15: 75% of estimated annual tax (cumulative — pay 30% more). March 15: 100% of estimated annual tax (cumulative — pay remaining 25%). Note for presumptive taxpayers (44AD/44ADA): Single installment — 100% by March 15 (no need for 3 earlier installments). Capital gains arising after due dates: proportionate relief available — no interest for the installment if capital gain occurs after that date.
How to calculate advance tax?
Advance tax calculation steps: (1) Estimate total income for the year: salary, business profit, rental, interest, capital gains, etc. (2) Apply deductions: 80C, 80D, HRA, standard deduction, etc. (3) Calculate tax on net income using applicable slabs + surcharge + cess. (4) Subtract TDS already deducted/to be deducted during the year. (5) If balance > ₹10,000 → advance tax required. (6) Calculate installment amounts per the 15%/30%/30%/25% schedule. Example: Estimated tax = ₹80,000, TDS = ₹20,000. Balance = ₹60,000. June 15 installment: ₹60,000 × 15% = ₹9,000. Sep 15: cumulative 45% = ₹27,000 (pay ₹18,000 more). Dec 15: cumulative 75% = ₹45,000 (pay ₹18,000 more). Mar 15: 100% = ₹60,000 (pay ₹15,000 more).
How to pay advance tax online?
Online advance tax payment steps: (1) Go to incometax.gov.in. (2) Click "e-Pay Tax" (no login required for payment). (3) Enter PAN and mobile number for OTP verification. (4) Select Challan 280 — Income Tax (other than companies). (5) Select Type of Payment: 100 – Advance Tax. (6) Select AY (e.g., AY 2026-27 for payments made in FY 2025-26). (7) Enter amount. (8) Pay via net banking/debit card/UPI/RTGS/NEFT. (9) Download challan receipt (BSR code + challan serial number). (10) Keep challan safe — report in ITR under "Tax Payments" schedule. Verify payment: appears in Form 26AS within 3-5 days.
What is the interest penalty for not paying advance tax?
Interest for advance tax defaults: Section 234B: If total advance tax paid is less than 90% of assessed tax — 1% per month (or part month) interest from April 1 to date of filing return. Section 234C: Short payment at each installment: 1% per month for 3 months on the shortfall for June/September/December installments; 1% per month for 1 month for March installment shortfall. Example: Tax of ₹1L, paid ₹0 by Sep 15. Shortfall = ₹45,000. Interest = ₹45,000 × 1% × 3 months = ₹1,350. Combined with 234B interest at filing. Self-assessment tax: paid when filing ITR — includes all shortfalls, interest Section 234A/B/C.
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