Question 1

Who needs to pay advance tax in India?

Accepted Answer

Any person whose estimated tax liability for the financial year exceeds ₹10,000 (after deducting TDS) is required to pay advance tax. This includes salaried individuals with significant non-salary income (capital gains, rental income, interest), self-employed professionals, freelancers, and businesses. Senior citizens (60+) without business/professional income are exempt from advance tax.

Question 2

What are the advance tax due dates and percentages?

Accepted Answer

Advance tax is payable in four quarterly instalments: 15% of the estimated tax by June 15, 45% (cumulative) by September 15, 75% (cumulative) by December 15, and 100% by March 15. Each instalment is the incremental amount needed to reach the cumulative percentage — so Q2 is 30% of the total, Q3 is 30%, and Q4 is 25%.

Question 3

What is interest under Section 234B?

Accepted Answer

Section 234B imposes interest at 1% per month (simple interest) if you fail to pay at least 90% of your assessed tax as advance tax. The interest is calculated on the shortfall from April 1 of the assessment year until the date of actual payment or assessment. For example, if your assessed tax is ₹2 lakh and you paid only ₹1 lakh as advance tax, interest applies on ₹1 lakh (₹80,000 shortfall below 90%) at 1% per month.

Question 4

What is interest under Section 234C?

Accepted Answer

Section 234C charges interest at 1% per month for 3 months on the shortfall in each quarterly instalment. If you pay less than 15% by June 15, interest is charged on the shortfall for 3 months. Similarly for September and December quarters. For the March quarter, interest is charged for 1 month on any shortfall. This interest is calculated independently of Section 234B.

Question 5

Is advance tax required if TDS covers most of my tax liability?

Accepted Answer

If TDS already deducted covers at least 90% of your total estimated tax for the year, and the remaining liability is under ₹10,000, you are not required to pay advance tax. However, if the net tax after TDS exceeds ₹10,000, you must pay the balance as advance tax in quarterly instalments to avoid interest under Sections 234B and 234C.

Question 6

How do I pay advance tax online?

Accepted Answer

Advance tax can be paid online through the Income Tax Department's e-filing portal (incometax.gov.in) or through authorised bank portals using Challan No. 280. Select "Advance Tax (100)" as the type of payment, enter your PAN and assessment year, choose your bank, and complete the payment. Keep the challan receipt for your records and cross-verify the credit on Form 26AS.

Question 7

Can I revise my advance tax estimate during the year?

Accepted Answer

Yes. Advance tax is based on your current estimate of annual income, which you can revise at any time. If your income estimate increases during the year, you should pay higher instalments in subsequent quarters to cover the cumulative percentage. If your estimate decreases, you can reduce future instalments. The key is to ensure 100% of the final assessed tax is paid by March 15.

Advance Tax Calculator India — Quarterly Instalments & Interest