Advance Tax: Due Date, Payment and More

Tax is one of the primary sources of revenue for the government to finance its expenditures around the year. This money is utilized for the development of the nation, infrastructure, and welfare of society.

It is also beneficial for the taxpayers. Taxpayers do not have to worry about running out of money or making last-minute tax payments when they pay their taxes in advance.

What is advance tax?

Simply stated, pay your tax liability before the end of the financial year.

Unlike the usual case, where tax is paid after the income has been earned, as per section 208 of the IT Act, tax should be paid in advance for the income earned in a particular financial year, if the estimated tax liability exceeds ₹10,000.

Advance tax payment due dates & amount

It is payable in installments on or before the due dates and will be paid in the same year the income is generated.

Sr. No. Due date of installment Amount Payable
1 15th June Atleast 15% of the advance tax liability
2 15th September Atleast 45% of the advance tax liability
3 15th December Atleast 75% of the advance tax liability
4 15th March Atleast 100% of the advance tax liability

How is advance tax calculated?

  1. Estimate all the earnings in a given year
  2. Subtract the amount of deductions eligible
  3. Compute the tax liability as the latest slab rates and the regime opted for
  4. Account for the taxes already paid
  5. If the tax liability exceeds ₹10,000, then adhere to the advance tax provisions and make the advance tax payment.

For your ease to calculate advance tax, use this Advance Tax Calculator

Key Considerations:

  • Individuals having salary income and are covered under TDS net are not liable to pay advance tax. However, any earnings from sources such as capital gains, rent, interest, or non-salary income are subject to advance tax.
  • Resident senior citizens aged 60 or above not having income under the “Income from Business & Profession” head are exempted from paying advance tax.
  • NRIs, whose accrued income in India exceeds Rs.10,000 are also required for advance tax payment.
  • If a taxpayer has opted for presumptive taxation, the advance tax can be paid in one installment on or before 15 March of the relevant year.

Late Advance Tax Payment

Any late payment of advance tax attracts a 1% interest penalty per month or part thereof under section 234B and/or 234C of the IT Act

Read more about Advance Tax under the Income Tax Act.

Hi I have paid advance tax in September 2022 for financial year 2022-23 i.e assessment year 2023-24 but my tax paid amount is not reflecting on form 26AS. What should I do.

Hi @Harsh_Vaidsain,

There can be a discrepancy in the income tax website.
You could verify with your AIS (Annual Information Statement) once if the amount is reflected over there or not.

Hope it helps.