Taxpayers often wonder whether they must pay advance tax when their annual income is moderate — say, around ₹10–₹12 lakh. With the new tax regime simplifying slabs and removing most deductions, the confusion is understandable.
So, if your income is below ₹12 lakh under the new regime, do you still need to pay advance tax? Let’s break it down clearly.
What Is Advance Tax?
Advance tax means paying your income tax in installments during the financial year instead of paying it all at once before filing your return.
You’re required to pay advance tax if your total tax liability (after TDS and deductions) is ₹10,000 or more in a financial year.
Advance Tax Rule Under the New Regime
The rule doesn’t depend on your salary amount directly — it depends on how much tax you owe after considering TDS (Tax Deducted at Source).
If your employer deducts TDS every month on your salary correctly, you don’t need to pay advance tax separately.
However, if you have:
Freelance or side income
Interest from FDs, capital gains, or rent
Income not covered by TDS
Then you may need to pay advance tax — even if your total income is under ₹12 lakh.
Example Scenarios
✅ Case 1: Salaried Employee Under New Regime
Annual income: ₹11.5 lakh
Employer deducts TDS monthly
👉 No advance tax needed — as your full tax is covered by TDS.
Case 2: Salary + Freelance Income
Salary: ₹10 lakh (TDS deducted)
Freelance: ₹2 lakh (no TDS)
Tax liability on freelance income = ₹30,000
👉 Advance tax required, since tax due > ₹10,000.
Case 3: Pensioner or Investor
Pension: ₹8 lakh (TDS deducted)
FD interest: ₹4 lakh (partial TDS)
👉 Check if total tax after all TDS exceeds ₹10,000. If yes, pay advance tax.
Advance Tax Payment Due Dates
If liable, you need to pay in four installments:
June 15: 15% of total tax
September 15: 45% of total tax
December 15: 75% of total tax
March 15: 100% of total tax
Penalty for Not Paying Advance Tax
If you skip advance tax when applicable, you may face:
Interest under Section 234B: For underpayment
Interest under Section 234C: For delay in payment
These are charged monthly until full payment is made.
Quick Check — Do You Need to Pay Advance Tax?
| Scenario | Advance Tax Needed? |
|---|---|
| Only salary income, proper TDS | ❌ No |
| Salary + business/freelance income | ✅ Yes |
| Interest income not covered by TDS | ✅ Yes |
| Senior citizen with only pension | ❌ No |
| Self-employed professional | ✅ Yes |
Conclusion
If your income is below ₹12 lakh and your employer deducts TDS correctly, you don’t need to pay advance tax separately.
But if you earn from other sources — such as rent, freelance work, or investments — and your total tax due exceeds ₹10,000, you must pay advance tax to avoid penalties.
Understanding your total taxable income and TDS coverage is key to staying compliant under the new tax regime.
Published on : 7th November
Published by : SMITA
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