Under India’s new income tax regime, taxpayers often wonder whether advance tax payment is necessary if their income is below ₹12 lakh.
The answer depends not just on your income level, but also on how much tax is payable after deductions and TDS (Tax Deducted at Source).
Let’s understand this 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.
It applies to individuals whose total tax liability (after TDS) is ₹10,000 or more in a financial year.
In short:
If your total tax due exceeds ₹10,000 after adjusting TDS, you must pay advance tax — regardless of whether your income is ₹6 lakh or ₹60 lakh.
Understanding Advance Tax Under the New Regime
Under the New Tax Regime (Section 115BAC), income slabs are lower and tax rates are simplified, but deductions like 80C, 80D, HRA, and LTA are not available.
Here are the current slab rates (FY 2025–26):
| Income Range (₹) | Tax Rate |
|---|---|
| 0 – 3,00,000 | Nil |
| 3,00,001 – 6,00,000 | 5% |
| 6,00,001 – 9,00,000 | 10% |
| 9,00,001 – 12,00,000 | 15% |
| 12,00,001 – 15,00,000 | 20% |
| Above 15,00,000 | 30% |
Standard Deduction: ₹50,000 (for salaried and pensioners).
Example 1: Salaried Employee (Income ₹12 Lakh)
Let’s calculate under the new regime 👇
Gross income: ₹12,00,000
Less Standard Deduction: ₹50,000
Taxable income: ₹11,50,000
Tax calculation:
0–3L → Nil
3–6L → 5% = ₹15,000
6–9L → 10% = ₹30,000
9–11.5L → 15% = ₹37,500
➡️ Total Tax = ₹82,500 + 4% cess = ₹85,800
Now, if your employer already deducts TDS from your salary every month, and total TDS = ₹85,800 —
✅ You don’t need to pay advance tax.
But if you’re self-employed, or your TDS is less than ₹85,800 —
⚠️ You must pay advance tax for the remaining amount (if it exceeds ₹10,000).
Example 2: Freelancer with ₹10 Lakh Income
Taxable Income (after deductions): ₹10,00,000
Tax payable:
0–3L → Nil
3–6L → ₹15,000
6–9L → ₹30,000
9–10L → ₹15,000
➡️ Total = ₹60,000 + 4% cess = ₹62,400
If no TDS is deducted (common for freelancers):
✅ You must pay advance tax, because your total tax due > ₹10,000.
Advance Tax Payment Schedule (FY 2025–26)
| Due Date | % of Total Tax Payable |
|---|---|
| 15th June 2025 | 15% |
| 15th September 2025 | 45% |
| 15th December 2025 | 75% |
| 15th March 2026 | 100% |
If you miss these deadlines, interest under Section 234B & 234C applies.
Who Does Not Need to Pay Advance Tax?
You don’t need to pay advance tax if:
You are a salaried employee and TDS covers your full tax liability.
Your total tax due after TDS is less than ₹10,000.
Your income is below ₹3 lakh (after deductions).
You are a senior citizen (60+ years) with no business income.
Penalties for Not Paying Advance Tax
If you skip advance tax payments when due:
Interest of 1% per month applies under Section 234B and 234C.
It continues until you pay the full amount.
Even small shortfalls can attract penalties — so it’s better to plan payments quarterly.
Pro Tip:
If your income fluctuates (for example, freelancers, consultants, or small business owners),
pay advance tax on estimated income and revise in the next quarter if your earnings change.
Conclusion
If your income is below ₹12 lakh, whether you need to pay advance tax depends on your final tax liability after TDS.
✅ If tax payable > ₹10,000 → Yes, pay advance tax.
❌ If tax payable < ₹10,000 or fully covered by TDS → No need to pay.
In short:
Even if your income is modest, advance tax applies to everyone who has taxable income and minimal TDS coverage — not just high earners.
Staying compliant avoids penalties and helps you manage taxes in smaller, stress-free installments.
FAQs:
Q1. Do I need to pay advance tax if my income is ₹12 lakh under the new regime?
Yes, only if your total tax liability exceeds ₹10,000 after TDS. If your employer deducts sufficient TDS, you don’t need to pay advance tax separately.
Q2. Who is required to pay advance tax?
Any individual whose total tax payable (after TDS) is ₹10,000 or more in a financial year must pay advance tax.
Q3. I am a salaried employee earning ₹11 lakh. Should I pay advance tax?
If your employer deducts TDS on salary, you don’t need to pay advance tax. However, if you have side income (like rent or freelancing) with additional tax liability, you must pay.
Q4. What happens if I don’t pay advance tax?
You’ll have to pay interest under Sections 234B and 234C, which can add up quickly.
Q5. Is advance tax applicable under both old and new regimes?
Yes. Advance tax rules apply under both tax regimes — only the tax slabs and rates differ.
Published on : 8th November
Published by : SMITA
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