Advance tax is a tax payable by individuals on income sources beyond their regular salary, including earnings from rent, capital gains, lottery earnings, fixed deposits and more. Payments can done online using e-filing portal.
Advance Tax Calculator – Calculate Advance Tax Liability
Use this intuitive tool from Cleartax to calculate your advance tax liability:
The due date for the Second instalment of advance tax is 15th September 2024 for FY 2024-25.
What is Advance Tax?
Advance tax is the income tax that is paid in advance instead of lump sum payment at the end of the financial year. It is the tax that you pay as you earn. These payments have to be made in instalments as per due dates provided by the income tax department.
Who Should Pay Advance Tax?
Salaried individuals, freelancers and businesses– If your total tax liability is Rs 10,000 or more in a financial year, you have to pay advance tax. The advance tax applies to all taxpayers, salaried individuals, freelancers, and businesses.
Senior citizens– People aged 60 years or more who do not run a business are exempt from paying advance tax. So, only senior citizens (60 years or more) having business income must pay advance tax.
Presumptive income for businesses–The taxpayers who have opted for the presumptive taxation scheme under section 44AD have to pay the whole amount of their advance tax in one instalment on or before 15th March. They also have the option to pay all of their tax dues by 31st March.
Presumptive income for professionals– Independent professionals such as doctors, lawyers, architects, etc. come under the presumptive scheme under section 44ADA. They have to pay the whole of their advance tax liability in one instalment on or before 15th March. They can also pay the entire amount by 31st March.
Read in detail about presumptive taxation here Want a CA to calculate and help pay your advance tax dues?
Note: No interest u/s 234C shall be levied if you have paid advance tax upto 12% in first instalment and upto 36% in second instalment.
Advance Tax Due Dates For FY 2024-25
FY 2024-25 for both individual and corporate taxpayers
| Due Date | Advance Tax Payment Percentage |
|---|---|
| On or before 15th June | 15% of advance tax |
| On or before 15th September | 45% of advance tax (-) advance tax already paid |
| On or before 15th December | 75% of advance tax (-) advance tax already paid |
| On or before 15th March | 100% of advance tax (-) advance tax already paid |
For taxpayers who have opted for Presumptive Taxation Scheme under sections 44AD & 44ADA – Business Income
| Due Date | Advance Tax Payment Percentage |
|---|---|
| On or before 15th March | 100% of advance tax |
How to Pay Advance Tax Online?
1. Visit the e-filing portal of the Income Tax Department of India
2. On the left side of the home page, there is a 'Quick Links' section, click on the 'e-Pay Tax' option. You can also search for 'e-Pay Tax' in the search bar.
3. On this page, enter your PAN and re-enter to confirm it. Then, enter your mobile number and click on ‘Continue’.
4. Now enter the 6-digit OTP received on your mobile number and 'Continue'.
5. Select the first box labelled as ‘Income Tax’ and click on ‘Proceed’
6. Select the ‘Assessment Year’ as 2025-26 and ‘Type of Payment’ as ‘Advance Tax (100)’ and click on 'Continue'.
7. Enter all the tax details
8. Select the payment method and the bank and press 'Continue'.
9. Preview the challan details and click on ‘Pay Now’. You may also ‘Edit’ these details if required.
10. After completing the payment, you will get an acknowledgement on the next screen. You can see the BSR code and challan serial number on the right side of the challan. Save a copy of this tax receipt for future reference. You will need to enter the BSR code and challan number in your tax return.
What is Advance Tax Late Payment Interest?
Interest on advance tax:
1. Non-payment of advance tax will attract interest under 234B: As per Section 234B, you must pay at least 90% of the total taxes as advance tax or TDS/TCS by 31st March. Failure to make advance tax payments will result in an interest @ 1% on the unpaid amount.
2. Delay in payment of advance tax will attract interest under 234C:
| Particulars | Rate of Interest | Period of Interest | Amount on which interest is calculated |
| If Advance Tax paid by 15th June is less than 15% | 1% per month | 3 months | 15% of Amount* (-) tax paid before June 15 |
| If Advance Tax paid by 15th September is less than 45% | 1% per month | 3 months | 45% of Amount* (-) tax paid before September 15 |
| If Advance Tax paid by 15th December is less than 75% | 1% per month | 3 months | 75% of Amount* (-) tax paid before December 15 |
| If Advance Tax paid by 15th March is less than 100% | 1% per month | 1 month | 100% of Amount* (-) tax paid before March 15 |
How Advance Tax Payment Calculated?
Below are the steps to compute your advance tax liability:
Step 1: Estimate your total income for the financial year from the various sources including capital gains, rental income, professional income, income from fixed deposits, salary and any other sources.
Step 2: From the gross receipts, reduce various deductions under section 80C, 80D, etc.
Step 3: Compute the tax payable on the basis of the current tax slab rates.
Step 4: Subtract any Tax Deducted at Source (TDS) that has already been deducted or is expected to be deducted based on the TDS rates.
If your tax liability after deducting TDS exceeds 10,000, you must pay the advance tax.
Example for Advance Tax Calculation
Let's understand the calculation with the help of an example. Ajay is a freelancer earning income from the profession of interior decoration. For the FY 2024-25, Ajay estimates his annual gross receipts at Rs 20,00,000. Ajay estimates his expenses at Rs 12,00,000. Ajay has deposited Rs 40,000 in PPF account. Ajay has also paid Rs 25,000 towards the LIC premium. Further, Ajay has paid Rs 12,000 towards the medical insurance premiums. Professional receipts of Ajay are subject to TDS. Ajay estimates a TDS of Rs 30,000 on certain professional receipts for the FY 2024-25. Besides professional receipts, Ajay estimates an interest of Rs 10,000 on fixed deposits held by him. Ajay’s advance tax liability would be as below:
| INCOME ESTIMATION FOR ADVANCE TAX | AMOUNT (Rs) | AMOUNT (Rs) |
| Income from profession: | ||
| Gross receipts | 20,00,000 | |
| Less: Expenses | 12,00,000 | 8,00,000 |
| Income from other sources: | ||
| Interest from fixed deposit | 10,000 | |
| GROSS TOTAL INCOME | 8,10,000 | |
| Less: Deduction under section 80C | ||
| Contribution to PPF | 40,000 | |
| LIC premium | 25,000 | |
| 65,000 | ||
| Deduction under section 80D | 12,000 | 77,000 |
| TOTAL INCOME | 7,33,000 | |
| TAX PAYABLE | 59,100 | |
| Add: Education cess @ 4% | 2,364 | |
| 61,464 | ||
| Less: TDS | 30,000 | |
TAX PAYABLE IN ADVANCE (as it exceeds Rs.10,000) | 31,464 |
| ADVANCE TAX PAYMENTS | ||
|---|---|---|
| Due date | Advance tax payable | Amount (Rs) |
| 15th June | 15% of Advance tax | 4,700 |
| 15th September | 45% of Advance tax | 9,400 (14,100-4700) |
| 15th December | 75% of Advance tax | 9,400 (23500-14100) |
| 15th March | 100% of Advance tax | 7900 (31,400-23500) |
Note:
1. The above example of tax liability is calculated under the old tax regime since deductions under section 80C are beneficial to the assessee & the said section is available only in the case of the old tax regime.
2. In the above case, the assessee is not liable to pay any advance if the net tax liability is not more than Rs.10,000, after adjusting with the TDS/TCS.
Tax payable/Tax Refundable
Advance tax is the payment of tax during the financial year in 4 instalments based on the estimated income for the year to avoid lump sum tax payment at the year end. If there is a shortage/excess of tax payment after adjusting advance tax, tax deducted at source & tax collected at source, the assessee would arrive at the tax payable or tax refundable, respectively.
Other Articles:
1. ITR Filing Last Date
2. What is Self Assessment Tax