Advance Tax Payment Guide: How to Calculate, Pay Online, Slab Rates and Due Dates

What Is Advance Tax? Full Guide on Calculation, Slabs, Payment Process and Due Dates

In India, tax laws require individuals and businesses to pay taxes throughout the year instead of only at the time of filing the Income Tax Return. This system is known as advance tax, and it plays an important role in maintaining the country’s revenue flow. Many taxpayers, especially first-time earners and small business owners, often find the topic confusing. This detailed guide explains what is advance tax, how it works, who should pay it, its due dates, benefits, and the complete process to pay advance tax payment online and offline.

Important: Advance Tax Due Date

The advance tax due date for the 3rd instalment of Quarter 3 (FY 2025–26) is 15 December 2025.
By this date, every taxpayer who is required to pay advance tax must ensure that at least 75 per cent of their total tax liability for the financial year is paid.

This instalment applies to individuals, businesses, professionals, and any taxpayer whose estimated tax liability for the year is more than Rs. 10,000 after adjusting TDS and TCS. Paying the amount on or before the deadline helps avoid interest under Section 234C for short payment or late payment.

What is Advance Tax and How Is It Calculated?

Advance tax is the income tax you pay in instalments during the same financial year in which you earn the income. Instead of paying the entire tax at the end of the year, taxpayers deposit a part of it in multiple instalments as per the advance tax payment dates set by the Income Tax Department.

You must calculate your total expected income for the financial year and then compute your tax liability after subtracting TDS, deductions and exemptions. If your total tax payable is ₹10,000 or more, you must pay advance tax.

Calculation Method (Simple Explanation)

1. Estimate your total annual income
2. Deduct exemptions (HRA, LTA, etc.) and deductions (80C, 80D, etc.)
3. Calculate your total income tax liability using the applicable slab rates
4. Subtract TDS already deducted
5. If the remaining tax amount exceeds ₹10,000, you must pay advance tax

Taxpayers typically use the advance tax slab table to split this amount into instalments. A detailed table is provided later in this article.

What Is Meant by Advance Tax?

In simple words, advance tax means paying your income tax in advance rather than paying everything at the end of the year. The government collects tax in four phases instead of a single payment. This system helps the government maintain steady revenue and helps taxpayers avoid a huge lump-sum payment later.

What Is the Rate of Advance Tax?

There is no separate tax rate for advance tax. The calculation is based on the regular income tax slab rates applicable to the taxpayer. The only difference is the instalment schedule known as advance tax dates.

Who Gives Advance Taxes?

The following taxpayers need to pay advance tax:

1. Salaried individuals
2. Freelancers
3. Professionals (CA, doctors, lawyers, architects, consultants)
4. Businesses
5. Income from interest, capital gains, rent, commission or any other income not fully covered by TDS

Taxpayers under the presumptive taxation scheme also must follow a different due date schedule.

Refund in Advance Tax Payment

If you pay extra money as advance tax, you will receive a refund after filing your Income Tax Return. The Income Tax Department processes the refund amount directly to your bank account along with interest (if applicable).

Who Is Eligible for Advance Tax?

Any taxpayer whose estimated tax liability is ₹10,000 or more after TDS must make advance tax payment as per the advance tax section of the Income Tax Act.

Individuals who are 60 years or older and do not earn any income from business are not required to pay advance tax.

What Is Advance Tax in GST?

In GST, the concept of advance tax applies only to newly registered taxpayers under the GST composition scheme. They must pay an advance amount equal to their expected tax liability for the year. This is not related to the Income Tax advance tax.

Is There Any Benefit of Advance Tax?

Yes, there are several benefits:

1. You avoid paying a large amount of tax at once
2. You avoid interest under sections 234B and 234C
3. You maintain a clear tax record
4. You avoid last-minute financial pressure
5. You stay compliant with income tax provisions

For many individuals, especially business owners, advance tax payment provides better financial planning.

How to Pay Advance Tax Payment? Online & Offline Mode

The Income Tax Department allows both online and offline payments. However, most taxpayers prefer advance tax payment online because it is faster and easier.

1. Online Method: How to Pay Advance Tax Online?

The official method is through the Income Tax Portal or TIN-NSDL portal.

Steps:

1. Go to the official tax payment portal
2. Select Challan 280 (this is the advance tax challan)
3. Choose the type of payment
4. Select Assessment Year correctly
5. Enter PAN, address and other required details
6. Make the payment through net banking, debit card or UPI
7. Download the challan receipt

This is the most commonly used method for income tax advance tax payment.

2. Offline Method: Pay Advance Tax Through Bank Branch

1. Visit an authorised bank branch
2. Request Challan 280
3. Fill in the details manually
4. Submit cash or cheque
5. Collect the stamped receipt

Although offline payment is still valid, digital payment through advance tax payment online has become the standard method.

Is Advance Tax Compulsory?

Yes, advance tax is compulsory if your estimated tax is ₹10,000 or more in a financial year. Not paying on time adds interest and penalty.

Why Do I Have to Pay Advance Tax?

You must pay advance tax because the government collects revenue throughout the year rather than waiting for taxpayers to file returns. It ensures timely cash flow and reduces tax evasion.

Advance Tax Due Date for FY 2024-25

The advance tax due dates for individuals and businesses (other than presumptive scheme) are:

Due Date	Minimum Advance Tax to Be Paid
15 June	15 percent
15 September	45 percent
15 December	75 percent
15 March	100 percent

For taxpayers under presumptive taxation (44AD/44ADA), the due date is 15 March (100 percent payment).

These dates are essential for filing and payment tracking, especially for those who plan pay advance tax online.

Advance Tax Slab Table

The following table shows how the advance tax slab works for instalments:

Instalment	Percentage of Tax Payable	Due Date
First Instalment	15 percent	15 June
Second Instalment	45 percent	15 September
Third Instalment	75 percent	15 December
Fourth Instalment	100 percent	15 March

These percentages apply after deducting TDS.

Common Mistakes in Advance Tax Payment

Many taxpayers make errors that cost them interest. A few mistakes to avoid include:

1. Wrong assessment year
2. Not including interest income
3. Missing deadlines
4. Incorrect advance tax payment challan selection
5. Not updating challan details in ITR

 Read also: How to File Income Tax Return Online

Final Thoughts

Advance tax is an important part of tax planning in India. Whether you are a salaried person, professional, freelancer or business owner, you must follow the advance tax payment dates and ensure your tax liability is paid on time. Paying advance tax not only keeps you compliant with tax rules but also helps you avoid unnecessary penalties.

FAQs: Common Public Questions

1. What happens if I miss the advance tax due date?

If you miss the advance tax due date, the Income Tax Department charges interest under sections 234B and 234C. This interest is calculated on the unpaid tax amount and continues until the entire tax is paid. Even if you pay the tax later, the delay will still attract interest, so it is better to pay on time and avoid extra charges.

2. Can I pay advance tax after the due date?

Yes, you can still pay the tax after the due date. However, the payment will attract interest for late payment. The tax department accepts the payment anytime before 31 March of the financial year. It is always better to pay as early as possible to reduce the interest amount and avoid further financial burden.

3. Can I revise the advance tax amount?

Yes, you can revise the advance tax amount if your income increases or decreases during the year. Taxpayers are allowed to make additional payments in later instalments when income changes. The department does not restrict you from paying extra instalments, and you can correct your tax amount anytime within the year.

4. Which challan is used for advance tax?

The tax must be paid using Challan 280, which is meant for various direct tax payments including advance tax. You can use this challan both online and offline. The challan requires details such as PAN, assessment year, type of payment and tax amount. It is necessary to choose the right challan so that your tax payment is accurately captured in the system.

5. How do I check if my advance tax is updated in the system?

You can check your payment status through Form 26AS or the Annual Information Statement (AIS) on the Income Tax Portal. These statements show all tax payments made during the year, including TDS and advance tax. If your challan number appears correctly, it means the payment is updated. It usually reflects within a few days after payment.

6. Is advance tax paid every month?

No, advance tax is not paid monthly. It has fixed instalments during the financial year. Most taxpayers pay it in four instalments in June, September, December and March. Only taxpayers under the presumptive taxation scheme have a single due date in March. Monthly payments are not required under any provision.

7. Can salaried individuals avoid advance tax?

Salaried individuals may avoid paying advance tax if their entire tax liability is already covered through TDS deducted by their employer. However, if they have extra income such as interest, capital gains, rent, freelance income or any other income without TDS, they must pay advance tax. It is advisable to calculate total income properly to avoid penalties later.