Advance Tax Calculator

Use the Advance Tax Calculator now

How it is calculated

Advance tax is paid in four instalments: at least 15% by 15 June, 45% (cumulative) by 15 September, 75% by 15 December and 100% by 15 March. Paying less triggers interest under Section 234C (on each shortfall) and Section 234B (1% per month if under 90% is paid by year-end). Salaried taxpayers whose employer TDS covers the liability usually need not pay advance tax; it mainly applies to business, professional, capital-gains and other income.

The instalment percentages are cumulative

Advance tax is paid in four instalments and the percentages describe the running total rather than the individual payment: fifteen per cent by 15 June, forty-five by 15 September, seventy-five by 15 December and the whole liability by 15 March. The September instalment is therefore forty-five per cent less whatever was paid in June, not a further forty-five per cent. Reading the figures as separate payments leads to substantial overpayment early in the year, and reading them as unrelated leads to shortfalls that attract interest under section 234C. There is an important exception for taxpayers using the presumptive schemes under sections 44AD and 44ADA, who may pay the entire liability in a single instalment by 15 March — a genuine simplification for freelancers and small businesses, and one of the more useful features of electing into those schemes.

Who has to pay, and who is exempt

The trigger is a tax liability of ₹10,000 or more for the year after credit for tax deducted and collected at source. Note that the threshold is expressed in tax rather than in income: compute the tax first, subtract expected TDS, and then see whether the balance crosses the line. Most salaried employees never do, because their employer's deduction covers the liability — until there is income the employer does not know about, such as bank interest, dividends, rent, capital gains or freelance receipts, at which point the obligation applies to them as much as to anyone. There is one significant exemption: a resident senior citizen aged sixty or above with no income from business or profession is not required to pay advance tax at all and may settle the whole liability when filing. That relief is lost if there is any business income.

Capital gains get a specific reprieve

The scheme assumes you can forecast your income, which is impossible for gains that depend on a transaction you have not yet made. Section 234C therefore does not charge interest on capital gains, winnings and certain other unforeseeable income for instalments falling due before the income arose — provided the full tax on that income is paid in the instalment immediately following the transaction, or by 31 March where it arises after the final instalment date. The relief is conditional and unforgiving: miss that next instalment and it is lost entirely, and interest is computed as though the income had been foreseeable all along. So the practical rule after selling property, shares or mutual fund units is to establish immediately when the next instalment falls due and what tax the gain attracts, rather than leaving it to be dealt with at the year end.

234B and 234C measure different failures

Both run at one per cent a month and both relate to advance tax, which is why they are so often conflated, but they measure different things. Section 234B looks at the annual total: if the advance tax actually paid falls short of ninety per cent of the assessed liability, interest runs from April of the assessment year until the tax is paid. Section 234C looks at each instalment separately: if any of the four cumulative milestones was missed, interest runs for the period of that specific deferment. It is entirely possible to satisfy 234B by paying the right total late in the year while still owing 234C for paying it in the wrong rhythm. Both compute on calendar months with any part of a month counted in full, so a payment made a single day into a new month costs the same as one made thirty days in.

Paying it, and the mistake that costs months

Payment is made through the e-pay tax facility on the income tax portal, using net banking, a card, UPI or at a bank branch. The error that causes the most trouble is selecting the wrong assessment year — the financial year and the assessment year are different, and money credited to the wrong year has to be corrected through a request that takes time and follow-up while interest continues to accrue on the year that is actually short. The second common error is choosing self-assessment tax instead of advance tax as the payment type; the two are distinguished by timing, with anything paid before 31 March being advance tax. Keep the challan, and check after a few days that it appears in your Form 26AS, because your claim in the return is matched against that record rather than against the receipt in your hand.

Estimating income you cannot predict

Advance tax requires a forecast, and the honest position is that a forecast made in June will be wrong. The workable approach is to re-estimate at each instalment rather than to fix a number in June and stick to it. Start with what is reasonably certain — salary, contractual receipts, rent — and add investment income at a conservative estimate. Deduct expected TDS. As the year progresses, adjust the cumulative percentage to the revised income so that the total reaches a hundred per cent by March. Where income turns out lower than estimated and you have overpaid, the excess is refunded with interest when the return is filed, so erring slightly high is inexpensive. Where it turns out higher, the shortfall attracts interest that you pay. That asymmetry is the reason to lean towards over-estimating rather than under-estimating when the position is genuinely uncertain.

Advance tax and TDS are two halves of the same liability

They are not separate taxes and should not be computed separately. Work out the total tax on your estimated annual income, subtract the tax you expect to be deducted at source across the year, and only the balance is payable as advance tax. This is why most salaried employees pay none: the employer's deduction covers the liability entirely. The gap opens when income arrives that no one is deducting against, or where deduction happens at a rate below your slab — bank interest deducted at ten per cent for someone in the thirty per cent bracket leaves a substantial shortfall that surfaces only at filing. A useful habit is to open Form 26AS once around December, compare the TDS credited so far against your expected liability, and pay the difference in the March instalment rather than discovering it in July.

Frequently asked questions

Are senior citizens required to pay advance tax?

A resident senior citizen aged sixty or above with no income from business or profession is exempt and may pay the whole liability when filing. The relief is lost if there is any business income, so it applies to those living on pension, interest and similar income.

What if my income estimate changes during the year?

Re-estimate at each instalment and adjust the cumulative percentage so the total reaches a hundred per cent by 15 March. Overpayment is refunded with interest when you file, while a shortfall attracts interest you pay — so lean towards over-estimating when the position is genuinely uncertain.

Who has to pay advance tax?

Anyone whose total tax liability for the year, after TDS, is ₹10,000 or more — typically the self-employed, businesses, and people with capital gains, rent or interest income. Resident senior citizens without business income are exempt.

What happens if I miss an advance-tax instalment?

You pay interest: Section 234C charges 1% per month on each instalment shortfall, and Section 234B charges 1% per month from April if you paid less than 90% of the tax by 31 March.

Do salaried employees pay advance tax?

Usually not — the employer deducts TDS on salary. But if you have significant other income (capital gains, interest, freelance) that isn't covered by TDS, you may need to pay advance tax on it.

More free calculators

• HRA Exemption Calculator
• Gratuity Calculator
• Rent Receipt Generator
• Income Tax Calculator
• Reverse GST Calculator
• NPS / Retirement Calculator

Related reading

• Income Tax Slab Rates AY 2026-27 (FY 2025-26) — New vs Old Regime, Rebate, Surcharge & Marginal Relief