Advance Tax is a crucial part of the Indian taxation system. It ensures that taxpayers pay taxes throughout the financial year instead of waiting until the end of the year. Understanding Advance Tax due dates is essential to avoid penalties and interest charges under the Income Tax Act, 1961.
This guide explains who needs to pay Advance Tax, the due dates for FY 2024-25 (AY 2025-26), calculation steps, and compliance requirements.
What is Advance Tax?
Advance Tax is also known as pay-as-you-earn tax.
It applies to individuals, businesses, and companies with a tax liability of ₹10,000 or more in a financial year.
- Relevant Sections:
- Section 208 – Liability for Advance Tax
- Section 209 – Computation of Advance Tax
- Section 211 – Due Dates and Instalments
- Section 234B & 234C – Interest for non-payment or late payment
Who Needs to Pay Advance Tax?
- Individuals
- Salaried employees with additional income (rent, interest, capital gains, etc.).
- Freelancers and professionals.
- Senior citizens below 60 years of age.
- Businesses and Companies
- Proprietorship firms, partnerships, LLPs, and private limited companies.
Exemption:
Senior citizens aged 60 or above with no business income are not required to pay advance tax.
Advance Tax Due Dates for FY 2024-25 (AY 2025-26)
Instalment | Due Date | Minimum Advance Tax to be Paid |
---|---|---|
1st Instalment | 15th June 2024 | 15% of total tax liability |
2nd Instalment | 15th September 2024 | 45% of total tax liability (cumulative) |
3rd Instalment | 15th December 2024 | 75% of total tax liability (cumulative) |
4th Instalment | 15th March 2025 | 100% of total tax liability |
How to Calculate Advance Tax
Step 1: Estimate total income for the financial year.
Example sources: salary, freelancing, rent, business income, capital gains, etc.
Step 2: Deduct eligible deductions.
Examples: Section 80C (PPF, LIC), Section 80D (Health Insurance), etc.
Step 3: Compute total taxable income and apply the correct tax slab rates for FY 2024-25.
Step 4: Deduct TDS/TCS already paid.
Step 5: If the balance tax payable is ₹10,000 or more, pay Advance Tax as per the schedule.
Example: Advance Tax Calculation
Scenario:
- Total estimated income: ₹12,00,000
- Tax slab rates applicable for FY 2024-25:
- 0% for up to ₹3,00,000
- 5% for ₹3,00,001 to ₹6,00,000
- 10% for ₹6,00,001 to ₹9,00,000
- 15% for ₹9,00,001 to ₹12,00,000
Calculation:
- Tax up to ₹3,00,000 = 0
- Tax on next ₹3,00,000 @ 5% = ₹15,000
- Tax on next ₹3,00,000 @ 10% = ₹30,000
- Tax on next ₹3,00,000 @ 15% = ₹45,000
- Total Tax = ₹90,000
- Less: TDS deducted by employer = ₹30,000
- Net Advance Tax payable = ₹60,000
Payment Schedule:
- 15 June 2024: ₹9,000 (15%)
- 15 September 2024: ₹27,000 (cumulative 45%)
- 15 December 2024: ₹45,000 (cumulative 75%)
- 15 March 2025: ₹60,000 (cumulative 100%)
Penalties for Non-Payment or Delay
- Section 234B – Interest at 1% per month for not paying 90% of the total tax before 31st March.
- Section 234C – Interest for delay in paying instalments as per the due dates.
Steps to Pay Advance Tax Online
- Visit the Income Tax e-filing portal.
- Go to e-Pay Tax under “Quick Links”.
- Select Challan 280 – Advance Tax.
- Enter PAN, assessment year, and payment details.
- Pay via Net Banking, Debit Card, UPI, or NEFT/RTGS.
- Save the receipt (challan) for future reference.
Conclusion
Paying Advance Tax on time helps avoid penalties and ensures smooth tax filing at year-end.
For FY 2024-25, track the four key due dates and pay at least the specified percentage by each instalment date.
Timely compliance keeps you penalty-free and financially organized.
Call to Action
Stay updated with tax deadlines and plan your finances ahead.
Consult a tax professional to accurately estimate your advance tax and avoid penalties.
Disclaimer
This article is authored by Anshul Goyal, Chartered Accountant (ICAI India). The content is for educational purposes only and does not constitute professional tax advice. Please seek expert guidance for your individual situation.
FAQs on Advance Tax (2025)
Q1. Who must pay Advance Tax?
Anyone with a tax liability of ₹10,000 or more in a financial year, except senior citizens without business income.
Q2. How many instalments are there for Advance Tax?
Four instalments: June, September, December, and March.
Q3. What happens if I miss a due date?
Interest under Sections 234B and 234C will apply.
Q4. Is TDS considered in Advance Tax calculation?
Yes, subtract TDS already deducted before calculating your liability.
Q5. Can I pay more than the required percentage in earlier instalments?
Yes, you can pay extra in earlier instalments to reduce interest.