FY 2025-26

Advance Tax Calculator

Calculate your advance tax installments for FY 2025-26, view due dates, and avoid costly interest under Sections 234B & 234C.

What is Advance Tax and Who Must Pay It? (FY 2025-26)

Advance tax, sometimes called "pay as you earn" tax, is a mechanism where India's income tax system requires taxpayers to pay their expected annual income tax in four installments throughout the financial year, rather than as a lump sum at year-end. This system ensures a steady flow of revenue to the government and prevents taxpayers from being burdened with a massive one-time tax payment during the busy March filing season.

The rule is simple: if your estimated income tax liability for the financial year exceeds ₹10,000 (after accounting for all TDS deductions), you are obligated to pay advance tax. This threshold applies to salaried employees, self-employed individuals, business owners, freelancers, and professionals like doctors, lawyers, and architects alike.

Advance Tax Due Dates for FY 2025-26

The Income Tax Department has prescribed the following schedule for advance tax payments:

Installment Due Date Cumulative % to Pay
1st Installment 15 June 2025 15%
2nd Installment 15 September 2025 45%
3rd Installment 15 December 2025 75%
4th Installment 15 March 2026 100%

Penalty for Missing Advance Tax: Sections 234B & 234C

Missing an advance tax installment or paying less than the required percentage by the due date triggers penal interest under two specific sections of the Income Tax Act:

  • Section 234C (Deferment of Installments): If you pay less than the required cumulative percentage by any installment due date, you are charged a simple interest of 1% per month for 3 months on the shortfall amount for each installment missed. This interest is calculated separately for each installment that was deficient.
  • Section 234B (Default in Payment of Advance Tax): If you fail to pay advance tax altogether, or if you paid less than 90% of the assessed tax by March 31st, you are charged a simple interest of 1% per month on the entire shortfall from April 1st until the date of actual tax payment.

In total, failing to plan advance tax payments can result in an effective annual interest burden of 12% per annum — which is significant for high-income individuals. Our advance tax calculator for FY 2025-26 above automatically shows you each installment's exact amount, helping you plan your payments in advance and stay completely interest-free.

Advance Tax for Business Owners & GST Registered Businesses

For business owners who are also registered under GST, the financial planning picture is more complex. Not only must you pay advance tax on your income on the IT side, but you also have monthly or quarterly GST outflows. Failing to separate these obligations often leads to cash flow crunches, especially in Q4 (January-March). Our recommendation is to plan both obligations together using a single annual cash flow calendar — using this advance tax calculator for income tax payments and our GST Late Fee Calculator to stay GST-compliant simultaneously.

Senior Citizen Exception

Resident senior citizens (aged 60 or above) who do not have any income from business or profession are completely exempt from advance tax. They may pay their entire tax liability as Self-Assessment Tax after the financial year ends, without any interest liability under Sections 234B or 234C.

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Frequently Asked Questions

All about advance tax calculation, due dates, and penalties in India.

What is advance tax?
Advance tax is the income tax you pay before the end of the financial year, in instalments throughout the year, rather than as a lump sum at the end. It is also called "pay-as-you-earn" tax. If your total tax liability for the year exceeds ₹10,000, you are required to pay advance tax.
Who is required to pay advance tax?
Anyone whose estimated total income tax liability for the year exceeds ₹10,000 must pay advance tax. This includes salaried employees (if TDS deducted is insufficient), business owners, freelancers, and investors. Senior citizens (60+) who have no business income are exempt from advance tax.
What are the advance tax due dates for FY 2025-26?
1st Instalment: 15th June — Pay 15% of estimated tax. 2nd Instalment: 15th September — Pay 45% (cumulative). 3rd Instalment: 15th December — Pay 75% (cumulative). 4th Instalment: 15th March — Pay 100% (cumulative). Missing these dates attracts interest under Section 234B and 234C.
How do I calculate my advance tax?
Step 1: Estimate your total income for the year (salary + business + capital gains + other sources). Step 2: Calculate tax on this income as per the applicable slab rates. Step 3: Subtract TDS already deducted and any TCS credits. Step 4: If the result exceeds ₹10,000, pay advance tax in the installments mentioned above.
What is Section 234C interest for short payment of advance tax?
Section 234C charges simple interest at 1% per month (or part of a month) if you pay less than the required cumulative percentage by each due date. Interest is charged on the shortfall for 3 months for each installment (except the last one, which is 1 month). This interest is mandatory and added to your final tax liability.
What is Section 234B interest for non-payment of advance tax?
Section 234B charges 1% per month (simple interest) on the unpaid advance tax if you have paid less than 90% of the total tax liability as advance tax by 31st March. This interest is calculated from 1st April to the date of actual payment of tax.
Does a freelancer or self-employed person need to pay advance tax?
Yes, absolutely. Freelancers, consultants, and self-employed professionals have no TDS deducted at source for most of their income. They must estimate their annual income and pay advance tax in the four instalments. Missing advance tax attracts interest under Sections 234B and 234C.
Is advance tax applicable to capital gains income?
Yes, but with a concession. If you earn capital gains after the 3rd instalment (December 15th), you can pay the entire capital gains tax as the 4th instalment by March 15th without attracting 234C interest. However, Section 234B interest may still apply if less than 90% of total tax is paid by March 31st.
What happens if I overpay advance tax?
If you pay more advance tax than your actual tax liability, the excess is refunded by the Income Tax Department after filing your ITR. Additionally, you are entitled to interest at 6% per annum on the refund amount under Section 244A from April 1st of the assessment year until the date of refund.
Can I pay advance tax online?
Yes. Advance tax is paid online through the Income Tax Portal (incometax.gov.in) or via net banking using Challan 280. Select "Advance Tax" as the type of payment, and choose the correct Assessment Year (the year after the financial year you are computing tax for). Keep the payment receipt for your records.