📘 What is Advance Tax?
Advance tax is a way of paying income tax in installments, rather than as a lump sum at the end of the financial year. If your total tax liability exceeds ₹10,000 in a financial year (after TDS/TCS), you need to pay advance tax.
It applies to individuals, businesses, and freelancers — basically anyone with significant income not subject to TDS.
📅 Advance Tax Due Dates for FY 2024-25 (AY 2025-26)
| Due Date | Advance Tax Payable |
|---|---|
| 15th June 2024 | 15% of total tax liability |
| 15th September 2024 | 45% of total tax liability (cumulative) |
| 15th December 2024 | 75% of total tax liability (cumulative) |
| 15th March 2025 | 100% of total tax liability |
🔹 For Businesses under Presumptive Scheme (44AD/44ADA): Pay the whole amount (100%) by 15th March.
💸 Interest & Late Fees for Delayed Payment (Section 234B & 234C)
Section 234B (Non-payment/Short Payment of Advance Tax)
- 1% interest per month or part thereof on the unpaid amount, if you paid less than 90% of your total tax by 31st March.
Section 234C (Deferred Payment of Advance Tax)
- 1% interest per month for delay in installment payments.
| Period | Interest Calculation |
|---|---|
| 1st Installment (15th June) | 1% for 3 months on shortfall amount |
| 2nd Installment (15th Sept) | 1% for 3 months on shortfall amount |
| 3rd Installment (15th Dec) | 1% for 3 months on shortfall amount |
| 4th Installment (15th March) | 1% for 1 month on shortfall amount |
🛠️ How to Calculate Advance Tax?
- Estimate Total Income: Include salary, business income, rent, interest, capital gains, etc.
- Calculate Tax Liability: Apply the appropriate income tax slab rates.
- Reduce TDS/TCS Credit: Subtract the tax already deducted at source.
- Compute Advance Tax: If the net tax payable is over ₹10,000, pay it as per the due dates.
