What is Advance Tax? — Meaning, Definition & Example
Definition
Advance tax is income tax paid in instalments during the financial year instead of at year-end, applicable when tax liability exceeds ₹10,000. Due dates: 15% by June 15, 45% by Sep 15, 75% by Dec 15, 100% by Mar 15. Interest under Section 234B/234C applies for non-payment.
A freelancer earning ₹15 lakh/year pays advance tax quarterly: ₹22,500 by June, ₹45,000 by Sep, ₹45,000 by Dec, ₹37,500 by March.
🇮🇳 Advance Tax in Hindi / हिंदी में
एडवांस टैक्स — एडवांस टैक्स वित्तीय वर्ष के दौरान किस्तों में भुगतान किया जाने वाला आयकर है, जब कर देनदारी ₹10,000 से अधिक हो।
Advance Tax (Hinglish) — Advance tax wo income tax hai jo financial year ke dauraan instalments mein pay karna padta hai jab tax liability ₹10,000 se zyada ho.
Who Actually Has to Pay (Fewer People Than You Think)
Advance tax applies when your remaining tax liability — AFTER all TDS — exceeds ₹10,000 in a year. Pure-salary earners rarely trigger it (employer TDS covers them). The usual triggers: freelance/business income, big capital gains, chunky FD/rent income beyond TDS coverage. And one clean exemption: resident senior citizens (60+) with no business income owe NO advance tax at all — interest income alone never obligates them.
The Calendar That Prevents Penalties
| Due Date | Cumulative Tax Paid | Note |
|---|---|---|
| 15 June | 15% | First estimate — refine later |
| 15 September | 45% | Catch-up point for mid-year surprises |
| 15 December | 75% | |
| 15 March | 100% | Presumptive (44AD/44ADA) filers pay their ENTIRE tax in this one shot |
Estimates are allowed to be imperfect — the schedule is cumulative, so each installment can correct the last. Freelancers on presumptive taxation get the simplest deal in the system: one payment, 15 March, done.
234B and 234C — What Late Actually Costs
234C: miss an installment's cumulative % and you pay 1%/month interest on the shortfall for that quarter — annoying, small. 234B: finish the year having paid less than 90% of total liability and 1%/month runs from 1 April until you settle — this one compounds into real money. The pattern to avoid: 'I'll square it at filing time' — that's four-plus months of 234B by July.
The Capital-Gains Relief Everyone Should Know
Windfalls can't be predicted, so the law doesn't punish them retroactively: gains (or lottery-type income) arising after an installment date only need to be covered from the NEXT installment onward. Sold shares with a ₹5L gain in October? No 234C for June/September — just include it by 15 December. Book the event, diary the next due date.
Paying Takes 5 Minutes
e-filing portal → e-Pay Tax → Advance Tax (challan 280 equivalent) → net-banking/UPI → the credit appears in your 26AS/AIS within days. Estimate your liability honestly with our advance tax calculator (engine verified, includes the 87A marginal relief) and revisit each quarter — the calendar rewards small course-corrections over one heroic March payment.
Rules verified as of July 2026 (incl. GST 2.0 structure effective 22 Sep 2025 and FY 2026-27 tax framework). Facts last checked: 18 July 2026 by Priyanka Dhawan.