—Guide
Advance Tax in India: Who Must Pay, Due Dates and Interest Explained
Who has to pay advance tax, the four instalment dates, the special rules for presumptive taxpayers and seniors, and how interest is charged when you pay late.
Income tax isn't only paid at year end. If your tax for the year is large enough, you're expected to pay it in instalments during the year, as advance tax. This guide explains who pays, when, and what happens if you don't.
Note: this article describes the rules under the Income-tax Act, 1961. The Income-tax Act, 2025 applies from 1 April 2026 (tax year 2026-27), with renumbered provisions and updated forms, so check the current position for later periods.
Who Must Pay
Anyone whose estimated tax for the year, after TDS and TCS, is ₹10,000 or more — companies, firms, LLPs and individuals alike. Resident senior citizens without business or professional income are exempt.
The Instalments
- By 15 June: at least 15% of the year's tax.
- By 15 September: at least 45%.
- By 15 December: at least 75%.
- By 15 March: 100%.
Businesses and professionals under the presumptive schemes can pay the whole amount by 15 March.
Interest
For deferment
If less than the required percentage is paid by an instalment date, interest of 1% per month applies on the shortfall, generally for three months for the first three instalments and one month for the last. Small margins are allowed for the June and September instalments.
For default
If total advance tax paid is less than 90% of the tax finally assessed, interest of 1% per month applies on the shortfall from 1 April after the year end until it's paid.
Capital Gains and Unexpected Income
Tax on capital gains and certain other income that couldn't be anticipated can be paid in the instalments remaining after the income arises, without deferment interest, as long as it's paid then.
How to Estimate
- Start from last year's income, adjusted for what you know about this year.
- For businesses, use actual results to date before each instalment.
- Deduct TDS and TCS already deducted.
- Pay the difference needed to reach the cumulative percentage.
Paying
Advance tax is paid online through the income-tax portal's e-payment facility, choosing advance tax as the type of payment.
Getting Help
Think Filing computes advance tax before each instalment date for businesses and individuals.