Frequently Asked Questions
What is advance tax and who must pay it? ＋
Advance tax is income tax paid in installments during the financial year rather than as a lump sum at year-end. It is applicable if your total tax liability for the year exceeds ₹10,000. Salaried employees whose employer deducts TDS are largely covered, but those with significant other income (rent, capital gains, freelance) must pay advance tax.
What are the advance tax installment due dates? ＋
For FY 2025-26: 15% by June 15 | 45% by September 15 | 75% by December 15 | 100% by March 15. Each installment is cumulative. Senior citizens (60+) without business income are exempt from advance tax.
What is the interest penalty for not paying advance tax? ＋
Section 234B: 1% per month interest if advance tax paid is less than 90% of assessed tax. Section 234C: 1% per month for shortfall in each installment. Interest is calculated on the shortfall amount from the due date to the date of actual payment.
How is advance tax calculated for salaried + freelance income? ＋
Add all income sources: salary, freelance, rent, capital gains, interest, etc. Deduct applicable deductions (80C, 80D, HRA, etc.). Calculate tax on net income using applicable slab. Subtract TDS already deducted. If net tax liability > ₹10,000, pay in installments.
Do self-employed and freelancers need to pay advance tax? ＋
Yes. Self-employed individuals, freelancers, consultants, and business owners must pay advance tax if their net tax liability exceeds ₹10,000. For those under presumptive taxation (Section 44AD/44ADA), the entire advance tax can be paid in a single installment by March 15.