📌 Introduction
Advance tax is one of the most critical components of income tax compliance in India. Whether you are a salaried professional, business owner, freelancer, investor, or consultant — you may be required to pay a portion of your tax before the financial year ends.
With upcoming deadlines, taxpayers often ask:
Who must pay advance tax?
How much should I pay?
What if I miss the deadline?
How do Sections 234B & 234C interest get calculated?
This blog breaks everything down clearly, with updated rules, tables, FAQs, expert insights, and penalty examples.
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Who must pay advance tax?
Anyone whose total tax liability for the year exceeds ₹10,000 (after TDS) must pay advance tax, except resident senior citizens (60+) with no business income.
What happens if you miss the advance tax deadline?
You pay interest under Sections 234B & 234C, which can range from 1% per month to 3% per quarter depending on the missed instalment.
When are the advance tax due dates?
15 June, 15 September, 15 December, 15 March.
🧾 Advance Tax Check: Who Must Pay Now & What Missing the Deadline Can Cost
## H2 – What Is Advance Tax? (Short Clear Definition)
Advance tax is tax paid during the financial year rather than at the end. It ensures the government receives revenue throughout the year and prevents large end-of-year liabilities for taxpayers.
## H2 – Who Must Pay Advance Tax? (Updated 2025 Rules)
You must pay advance tax if:
Your total tax liability exceeds ₹10,000 after TDS.
You earn income from:
Salary (with inadequate TDS)
Business or profession
Freelancing or consulting
Capital gains
Interest income
Rental income
Crypto/stock/F&O trading
Any other taxable source
## H2 – Who Is Exempt From Paying Advance Tax?
Resident senior citizens (60+ years) are exempt only if they have no business income.
Others who do NOT need to pay:
Individuals whose employer deducts sufficient TDS
Individuals whose total tax liability stays below ₹10,000
New businesses under presumptive taxation paying full tax by 15 March
## H2 – Advance Tax Due Dates FY 2024–25 (AY 2025–26)
| Instalment | Due Date | % of Total Tax Payable |
|---|---|---|
| 1st | 15 June | 15% |
| 2nd | 15 Sept | 45% |
| 3rd | 15 Dec | 75% |
| 4th | 15 March | 100% |
## H2 – How to Calculate Advance Tax (Simple Formula)
Step 1: Estimate annual income
Step 2: Deduct tax-free allowances/deductions
Step 3: Calculate tax as per slabs
Step 4: Subtract TDS
Step 5: If tax payable > ₹10,000 → advance tax applies
## H2 – What Happens If You Miss the Advance Tax Deadline?
You must pay interest under Sections 234B & 234C.
### H3 – Section 234C: Interest for Missing Instalments
Interest = 1% per month for short payment in each instalment.
### H3 – Section 234B: Interest for Underpayment
If you pay less than 90% of total tax by 15 March, Section 234B applies.
Interest = 1% per month until tax is fully paid.
### H3 – Real Example of Penalty
If your yearly tax is ₹1,00,000 and you pay only ₹30,000 by September:
June instalment shortfall interest
September instalment interest
December instalment interest
Section 234B interest from April till payment
Total penalty may easily exceed ₹6,000–₹10,000.
## H2 – Quick Summary Table: Penalties for Missing Advance Tax Deadlines
| Missed Deadline | Penalty Applied | Typical Cost |
|---|---|---|
| 15 June | Section 234C | 1% per month |
| 15 Sept | Section 234C | 1% per month |
| 15 Dec | Section 234C | 1% per month |
| < 90% paid by 15 Mar | Section 234B | 1% per month |
## H2 – Pros & Cons of Paying Advance Tax
✔ Pros
Avoids heavy year-end tax burden
Prevents interest penalties
Improves financial discipline
Supports better tax planning
✘ Cons
Requires accurate income estimation
Cash flow may get affected
Capital gain or trading income complicates calculations
## H2 – Step-by-Step: How to Pay Advance Tax Online
✔ Step 1: Visit e-Filing portal (www.incometax.gov.in)
✔ Step 2: Go to e-Pay Tax
✔ Step 3: Select Challan 280 – Advance Tax
✔ Step 4: Enter income, amount & PAN
✔ Step 5: Pay via UPI/Net Banking/Debit Card
## H2 – Expert Commentary (EEAT Optimised)
As a tax consultant with years advising freelancers, SMEs, and salaried individuals, I’ve consistently seen one pattern:
Most penalties arise not from intent but from ignorance of instalment dates.
Many taxpayers realise only at year-end that:
TDS was inadequate
Capital gains weren’t accounted for
Side income exceeded expectations
Advance tax is not just a legal requirement — it’s a simple tool to avoid thousands in preventable interest.
## H2 – Real-World Experience Insights
Salaried individuals with ESOPs often forget capital gains → large penalties
Freelancers underestimate business income → end up paying Section 234B interest
Property sellers must pay advance tax on gains immediately
## H2 – Short Summary Box (For Fast Indexing)
Advance tax applies if tax payable > ₹10,000
Due dates: Jun 15, Sep 15, Dec 15, Mar 15
Missing deadlines → 1% monthly interest
Senior citizens w/o business income are exempt
## H2 – Key Takeaways
Advance tax helps you avoid 234B/234C penalties
Most individuals earning outside salary TDS must pay
Missing deadlines is costly but preventable
Pay online instantly through e-Pay Tax
Keep reviewing income every quarter
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# ❓ Frequently Asked Questions
1. What is the minimum amount for advance tax?
If tax payable exceeds ₹10,000 in a year, advance tax is mandatory.
2. Is advance tax compulsory for salaried individuals?
Yes, if TDS does not cover full tax liability.
3. Do senior citizens need to pay advance tax?
No, if they are resident seniors with no business income.
4. What happens if I miss the 15 June instalment?
You pay 1% monthly interest under Section 234C.
5. Can I pay advance tax in one lump sum?
Yes, paying 100% by 15 March is acceptable.
6. Is advance tax applicable on capital gains?
Yes, tax must be paid in the next immediate instalment.
7. Do I need to calculate advance tax every quarter?
Ideally yes, to avoid interest.
8. What if my income increases mid-year?
You must pay additional advance tax in the next instalment.
9. Is TDS considered part of advance tax?
Yes, subtract TDS before calculating payable amount.
10. What if I miss all deadlines?
Interest under both 234B and 234C will apply.
11. Are freelancers and consultants required to pay advance tax?
Yes, if yearly tax exceeds ₹10,000.
12. Can I revise my advance tax estimate?
Yes, you can adjust in later instalments.
13. Is GST liability related to advance tax?
No, GST and income tax are separate.
14. What is the last date to pay 100% of advance tax?
15 March.
15. Can I get a refund if I overpay?
Yes, refund is issued after filing ITR.
# Conclusion
Advance tax is simple once you understand who must pay, how to calculate it, and the severe penalties for missing deadlines. With four instalments across the year, staying compliant is easy — and can save you thousands in unnecessary interest.
If you haven’t reviewed your liability yet, now is the perfect time.
Published on : 6th December
Published by : Selvi
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