Advance tax: who pays, when and how much

Advance tax means paying income tax during the year instead of at the end. It applies when your net tax liability for the year, after TDS, is ₹10,000 or more. It covers salaried persons with other income, professionals, businesses and investors with capital gains.

Instalments

Presumptive taxpayers (sections 44AD and 44ADA of the 1961 Act, now section 58 of the 2025 Act) pay the whole amount in one instalment by 15 March.

Who is exempt

A resident senior citizen with no income from business or profession does not need to pay advance tax.

Capital gains and other lumpy income

Advance tax is due on capital gains too, in the instalment due after the gain arises. If you sell property or shares, estimate the tax and pay it by the next due date to avoid interest. The property capital gains tool and the equity gains tool help estimate it.

Cost of shortfall

Interest accrues for a shortfall in the total advance tax and for paying late in an instalment, at 1% a month: section 234B (shortfall) and section 234C (deferment of instalments) of the Income-tax Act, 1961, now sections 424 and 425 of the Income-tax Act, 2025. Advance tax for tax year 2026-27 is governed by the 2025 Act. Pay by the due date or the nearest working day when it falls on a holiday.

Practical steps

1. Estimate your total income and tax for the year.
2. Deduct TDS shown in your annual tax statement (Form 26AS and the AIS, now Form 168).
3. Pay the instalments through the official payment portal and keep the challan.
4. Revisit the estimate before each due date.

Use the advance tax schedule to see the amounts and dates.