Tax · Pay-as-you-earn
Advance Tax
If your total tax liability for the year exceeds ₹10K AFTER TDS, you owe advance tax. Pay in 4 instalments: 15% by Jun 15, 45% (cumulative) by Sep 15, 75% by Dec 15, 100% by Mar 15. Miss a deadline → 1% per month interest under Section 234B/234C. Most relevant for freelancers, F&O traders, rental income, and salaried with significant non-salary income.
Who needs this
Freelancers, professionals (CA/Doctor/Architect/Consultant), F&O traders, rental landlords, dividend earners (>₹5K), and salaried with capital gains / interest income > ₹50K not covered by employer TDS.
Key dates
- Q1 advance tax (15%)Jun 15, 2026
- Q2 advance tax (45% cumulative)Sep 15, 2026
- Q3 advance tax (75% cumulative)Dec 15, 2026
- Q4 advance tax (100%)Mar 15, 2027
Key decisions
- Q1
Do I owe advance tax?
Yes, if (Total tax - TDS) > ₹10K for the year. Senior citizens (60+) without business income are EXEMPT — they can pay all tax at filing time without 234B/234C interest.
- Q2
What if I underpay?
234B (default in advance tax payment): 1%/month from Apr 1 of AY till payment. 234C (deferment of instalments): 1%/month for the shortfall in each quarter. Both apply concurrently.
- Q3
Presumptive 44ADA — special rule?
44ADA professionals (freelancers earning < ₹75L showing 50% as income) pay ALL advance tax in ONE shot by Mar 15. No 4-instalment requirement.
- Q4
Can I pay extra in Q4 to skip earlier?
No. 234C applies INSTALMENT-WISE. You must hit 15%/45%/75% deadlines or pay 234C interest, even if you pay 100% by Mar 15.
CBDT rules + tax-act references
- Threshold: total tax payable - TDS > ₹10K = advance tax due.
- 4 instalments: 15%/45%/75%/100% by Jun 15, Sep 15, Dec 15, Mar 15.
- 234B + 234C interest at 1%/month each — cumulative.
- Sr citizens (60+) without business income: EXEMPT from advance tax.
- 44ADA professionals: pay 100% by Mar 15 — single instalment exception.
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