Dec 17, 2025
If you earn income other than salary — such as rent, business profits, or capital gains — you’re likely required to pay advance tax.
This system ensures tax is collected in installments throughout the year, rather than at the end.
Here’s a complete breakdown of who needs to pay advance tax, calculation rules, due dates, and penalties for non-payment.
Who Has to Pay Advance Tax?
Anyone whose tax liability is ₹10,000 or more in a financial year (after TDS) must pay advance tax.
This includes:
Business owners and professionals.
Freelancers and consultants.
Investors earning capital gains.
Individuals with high rental income.
Advance Tax Due Dates for FY 2024–25
Installment | Due Date | % of Total Tax Payable |
|---|---|---|
1st | 15th June 2024 | 15% |
2nd | 15th September 2024 | 45% |
3rd | 15th December 2024 | 75% |
4th | 15th March 2025 | 100% |
Presumptive taxpayers (44AD/ADA) pay full 100% by 15th March in one installment.
How to Calculate Advance Tax
1️⃣ Estimate total income (business, interest, capital gains, etc.)
2️⃣ Deduct eligible deductions under 80C–80U.
3️⃣ Calculate total tax using slab rates.
4️⃣ Subtract TDS already deducted.
5️⃣ Pay the remaining amount as advance tax.
How to Pay Advance Tax Online
Click e-Pay Tax → Income Tax → Advance Tax (Self-Assessment)
Enter PAN, year, and amount → Pay via Net Banking/UPI.
Interest & Penalties
Section 234B: Interest @ 1% per month if <90% of total tax paid by year-end.
Section 234C: Delay in installment payment = 1% interest per month.
Conclusion
Advance tax ensures steady compliance and avoids heavy year-end payments.
Pay on time to reduce interest and show consistent tax discipline.
Continue reading:
→ TDS: Complete Guide for FY 2024–25
→ Presumptive Taxation Scheme under Sections 44AD & 44ADA
→ Common Income Tax Filing Mistakes & How to Avoid Them
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