Advance Tax: Applicability, Due Date, Penalty & Calculator
Advance tax is the income tax that is paid in advance rather than lump sum amount at the end of the financial year. The payment of advance tax is done in four instalments as per their due dates which are provided by income tax department. Many of you must have questions related to advance tax including applibility of advance tax, date dates and calculation. Through this post we will explore all about advance tax in 2025.
Who Should Pay Advance Tax?
1. Salaried people, Freelancers and Business Owners
In case your total tax is more than 10000 in a financial year then you are required to pay advance tax, it applied to all tax payers including salaried people, freelancers and business owners.
2. Senior Citizens
People above the age of 60, who do not earn income from business or professional are exempted from this. So senior citizens having income from other source except business and profession are required to pay advance tax.
3. Presumptive Income for Businesses
The taxpayers who have chosen the presumptive taxation scheme under section 44AD, they are required to pay the entire amount of their advance in one instalment on or before 15th of March every year. They also have option to pay the entire amount or dues on 31st of March.
4. Presumptive Income for Professionals
Professionals such as doctor, lawyers, teachers and more they all fall under the presumptive taxation scheme under section 44ADA, hence they are required to pay the entire amount on or before 15th of March, every year. They also have option to pay the entire amount or dues on 31st of March.
Advance Tax Due Dates for Corporate & Individual Taxpayers
| Due Date | Advance Tax Payment Percentage |
| On or before 15th of June | 15% of advance tax |
| On or before 15th of September | 45% of advance tax - advance tax already paid |
| On or before 15th of December | 75% of advance tax - advance tax already paid |
| On or before 15th of March | 100% of advance tax - advance tax already paid |
Advance Tax Late Payment Interest
If you do not pay advance as per the legal requirement on or before due date, you may face fine or late interest fee as mentioned below:
1. Interest under 234B for non-payment of advance tax
As per the section 234B, you must have to pay 90% of the total tax as advance tax by the 31st of March. In case you fail to pay then you will be charged interest @1% on the unpaid amount.
2. Interest under 234C for delay in payment of advance tax:
| Particulars | Rate of Interest | Period of Interest | Amount on which interest is calculated |
| If Advance Tax paid by 15th June is less than 15% | 1% per month | 3 months | 15% of Amount - tax paid before June 15 |
| If Advance Tax paid by 15th September is less than 45% | 1% per month | 3 months | 45% of Amount - tax paid before September 15 |
| If Advance Tax paid by 15th December is less than 75% | 1% per month | 3 months | 75% of Amount - tax paid before December 15 |
| If Advance Tax paid by 15th March is less than 100% | 1% per month | 1 month | 100% of Amount - tax paid before March 15 |
FAQs
Q. When should I pay advance tax?
When your tax liability exceeds 10,000 for a financial year, you are liable to pay advance tax.
Q. Is an NRI liable to pay advance tax?
Yes, an NRI is liable to pay advance tax if he or she has income earned in India and tax exceeds 10,000.
Q. I am a senior citizen with pension and interest income, do I have to pay advance tax?
Senior citizens who do not have income from business and profession are not liable to pay advance tax.
Q. Will I have to pay fine if I do not pay advance tax?
Yes, non-payment of advance tax can result in interest under section 234B and 234C of the Income Tax Act, 1961.
Read More: File ITR for NRI-Documents, Return Forms & Slab Rates
