Advance Tax Payment: Due Dates, Calculator, Applicability, Procedure, Installment Details

Advance Tax is a system of collecting income tax in advance from taxpayers in installments rather than paying a lump sum at the end of the financial year. Payment of advance tax helps taxpayers manage their tax liability, and timely payment helps to avoid interest penalties under sections 234B and 234C of the Income Tax Act. Individuals with a tax liability of more than Rs . 10,000 during the financial year must pay advance tax.

Every person is responsible for advance tax on income sources beyond their regular salary, including rent, capital gains, lottery earnings, fixed deposits, and more, as and when they earn. There are specific due dates within which advance tax has to be paid. 

Advance Tax Due Date

The due date to pay the 2st installment of advance tax for FY 2025-26 is September 15, 2025. Taxpayers should make sure to pay 45% of the total tax liability for the year by September 15, 2025. 

Advance Tax Calculator – Calculate Advance Tax Liability

Use this intuitive tool from ClearTax to calculate your advance tax liability:

What is Advance Tax?

Advance tax is income tax paid in advance through multiple installments instead of a lump sum payment at the end of the financial year. The taxpayer calculates the advance tax amount based on their estimated income for the financial year. The advance tax payments have to be made in four installments as per the due dates provided by the income tax department.

Payment of advance tax is compulsory for every person whose tax liability for the financial year is Rs.10,000 or more. If the person fails to make the payment of advance tax shall be liable to pay interest along with the tax amount.

Who Should Pay Advance Tax?

Salaried individuals, or any person engaged in profession or business, freelancers– If the  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 have income from any business or professional during the financial year are exempt from paying advance tax. Hence, only senior citizens (60 years or more) having business or professional 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 of the Financial Year. 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 of the Financial Year. They can also pay the entire amount by 31st March.

However, any person engaged in business and opted for the presumptive scheme under section 44AE is required to pay advance tax in four instalments on or before the due date as prescribed by the income tax department.

Read in detail about presumptive taxation here 

Want a CA to calculate and help pay your advance tax dues? Get in touch with ClearTax!

Advance Tax Due Dates For FY 2025-26

Individuals & Corporate Taxpayers

The due date for advance tax payments for FY 2025-26 is given below:

Regular Taxpayers 

Note: No interest u/s 234C shall be levied if you have paid advance tax up to 12% in first instalment and up to 36% in second instalment.

Taxpayers Opting Presumptive Taxation 

For taxpayers who have opted for Presumptive Taxation Scheme under sections 44AD & 44ADA – Business Income

How to Make Advance Tax Payment Online?

Step-1:  Visit the e-filing portal of the Income Tax Department of India
Step-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.

Step-3: On this page, enter your PAN and re-enter to confirm it. Then, enter your mobile number and click on ‘Continue’.

Step-4: Now enter the 6-digit OTP received on your mobile number and 'Continue'.

Step-5: Select the first box labelled as ‘Income Tax’ and click on ‘Proceed’
Step-6: Select the ‘Assessment Year’ as 2026-27 and ‘Type of Payment’ as ‘Advance Tax (100)’ and click on 'Continue'.
 

Step-7: Enter all the tax details.

Step-8: Select the payment method and the bank and press 'Continue'.

Step-9: Preview the challan details and click on ‘Pay Now’. You may also ‘Edit’ these details if required.

Step-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:

How to Calculate Advance Tax Payment?

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.

The below table will help you understand better.

Advance Tax liability will be 15%, 45%, 75%, and 100% of Net Tax Liability for the month of June, September, December, and March respectively. 

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 2025-26, 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 2025-26. 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:
 

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.

Adjustment of Excess/Shortage Advance Tax Amount

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. 

Conclusion

It is important to pay advance tax as and when applicable by the taxpayers. Failure to discharge advance tax liability will attract interest under sections 234C and 234B @ 1% per month each. However, in case of an excess payment of advance tax, the taxpayer will be eligible for a refund.  

Other Articles: 
1. ITR Filing Last Date  
2. What is Self Assessment Tax