About advance tax in India
Advance tax is the income tax you pay during the financial year as you earn, rather than in one lump sum after the year ends. The Income Tax Act calls it the "pay-as-you-earn" scheme. Under Section 208, any taxpayer whose tax liability for the year is 10,000 rupees or more after accounting for TDS must pay it in installments across the year.
The rule mainly affects people whose income is not fully covered by tax deducted at source: freelancers and consultants, business owners, professionals, landlords, and investors with large capital gains, dividend, or interest income. A salaried employee with no other income usually has nothing to pay here, because the employer's monthly TDS already settles the bill. Resident senior citizens aged 60 and above with no business or professional income are exempt from advance tax entirely and can pay by self-assessment instead.
This calculator takes your estimated annual tax, subtracts the TDS already deducted, and lays out the four statutory installments so you can see exactly how much to deposit by each due date and avoid interest under Sections 234B and 234C.
How the installment schedule works
Net advance tax is your estimated total tax for the year minus TDS already deducted. The four cut-off dates each carry a cumulative percentage of that net figure, set by Section 211.
Net advance tax = Estimated annual tax - TDS deducted By 15 Jun : 15% of net (cumulative) By 15 Sep : 45% of net (cumulative) By 15 Dec : 75% of net (cumulative) By 15 Mar : 100% of net (cumulative) Each installment due = (cumulative % x net) - amount already paid
- Estimated annual tax is your projected full-year liability including cess, on your best income estimate.
- TDS deducted is tax already withheld on salary, interest, rent, or fees.
- Cumulative percentages mean the September payment fills the gap between 45 percent and whatever you paid in June.
- Presumptive taxpayers (Sections 44AD and 44ADA) skip the first three dates and pay the full 100 percent by 15 March.
Worked example
A freelance designer estimates a total tax liability of 2,00,000 rupees for the year. A client has already deducted 20,000 rupees of TDS under Section 194J.
- Net advance tax: 2,00,000 - 20,000 = 1,80,000 rupees.
- By 15 Jun (15%): 27,000 rupees.
- By 15 Sep (45% cumulative): 81,000 total, so pay another 54,000.
- By 15 Dec (75% cumulative): 1,35,000 total, so pay another 54,000.
- By 15 Mar (100%): 1,80,000 total, so pay the final 45,000.
Advance tax schedule and interest reference
| Due date | Cumulative due | On 1,80,000 net | 234C if missed |
|---|---|---|---|
| 15 June | 15% | ₹27,000 | 1% x 3 months on shortfall |
| 15 September | 45% | ₹81,000 | 1% x 3 months on shortfall |
| 15 December | 75% | ₹1,35,000 | 1% x 3 months on shortfall |
| 15 March | 100% | ₹1,80,000 | 1% x 1 month on shortfall |
If total advance tax plus TDS ends below 90 percent of the final assessed liability, Section 234B adds a further 1 percent per month from 1 April until the balance is cleared.
Common pitfalls
- Underestimating income early in the year. Base each installment on a realistic full-year projection. A low June estimate that later proves wrong leaves you exposed to 234C interest on the shortfall.
- Treating the percentages as separate. They are cumulative. By December you should have paid 75 percent of the year's tax in total, not a fresh 75 percent.
- Forgetting capital gains and dividends. A large one-off gain can push you over the 10,000 rupee threshold even if your regular income would not. These get 234C relief only if paid in the installment after they arise.
- Ignoring health and education cess. The 4 percent cess is part of your tax liability, so include it in the annual figure before applying the percentages.
- Paying under the wrong head. Use challan ITNS 280 with the minor head 100 for advance tax. Tagging it as self-assessment tax (head 300) can leave your installment unrecorded against the due date.
Frequently asked questions
Who has to pay advance tax in India?
Any taxpayer whose total tax liability for the year, after subtracting TDS, is 10,000 rupees or more must pay advance tax under Section 208. This commonly covers freelancers, professionals, business owners, landlords with rental income, and anyone with large capital gains or interest income. Salaried employees whose only income is salary usually do not need to pay separately because their employer already deducts TDS each month. Resident senior citizens aged 60 or above with no business or professional income are fully exempt from advance tax.
What are the advance tax due dates and percentages?
For individuals there are four installments. By 15 June you must have paid at least 15 percent of the estimated annual tax, by 15 September 45 percent cumulatively, by 15 December 75 percent, and by 15 March the full 100 percent. The percentages are cumulative, so the September installment is the gap between 45 percent and what you already paid in June. Taxpayers under the presumptive scheme of Section 44AD or 44ADA pay 100 percent in a single installment by 15 March.
How is interest charged if I miss an advance tax installment?
Two sections apply. Section 234C charges simple interest of 1 percent per month for three months on any shortfall in each of the first three installments, and 1 percent for one month on the March shortfall. Section 234B charges a further 1 percent per month from 1 April until you pay, if the total advance tax plus TDS is less than 90 percent of the final assessed liability. Both are calculated on the rounded-down shortfall amount.
Does TDS count towards advance tax?
Yes. Tax already deducted at source on your salary, interest, rent, or professional fees is subtracted from your estimated annual tax before the installment percentages are applied. You only pay advance tax on the net liability that remains after TDS. That is why this calculator asks for both the estimated annual tax and the TDS already deducted, and applies the 15, 45, 75 and 100 percent schedule to the difference.
What happens to the 234C interest if my income was unpredictable?
Section 234C gives relief when a shortfall arises from income that could not reasonably be estimated earlier, such as capital gains, dividend income, or winnings from lottery. No interest is charged on that portion provided you pay the tax on it in the remaining installments, or by 31 March if it arose in the last quarter. For ordinary business or professional income, no such relief applies and you should base each installment on a realistic full-year projection.