Question 1

What is advance tax?

Accepted Answer

Advance tax is the income tax paid in installments during the financial year in which the income is earned, rather than as a lump sum at the end of the year. It is essentially a 'pay-as-you-earn' system mandated by the Income Tax Act. If your total tax liability for the year (after TDS) exceeds Rs 10,000, you are required to pay advance tax in quarterly installments.

Question 2

Who needs to pay advance tax?

Accepted Answer

Any person — salaried individuals, freelancers, businesses, or corporates — whose estimated tax liability for the year after subtracting TDS is Rs 10,000 or more must pay advance tax. Senior citizens (aged 60+) who do not have income from business or profession are exempt from paying advance tax.

Question 3

What are the quarterly due dates for advance tax?

Accepted Answer

For non-presumptive taxpayers, advance tax is due in four installments: 15% by June 15, 45% by September 15, 75% by December 15, and 100% by March 15 of the financial year. Taxpayers opting for presumptive taxation under Section 44AD or 44ADA must pay the entire advance tax in a single installment by March 15.

Question 4

What is Section 234B and 234C penalty?

Accepted Answer

Section 234B imposes interest at 1% per month (simple interest) on the shortfall if you pay less than 90% of your assessed tax as advance tax. Section 234C levies interest at 1% per month for deferment of individual advance tax installments — i.e., if you miss or underpay any quarterly installment. Both are calculated from the due date until the date of actual payment.

Question 5

How is advance tax calculated for freelancers under Section 44ADA?

Accepted Answer

Freelancers and professionals opting for presumptive taxation under Section 44ADA can pay the entire advance tax in a single installment on or before March 15 of the financial year. Under 44ADA, 50% of gross receipts is deemed as taxable income and the advance tax is calculated on that presumptive income.

Question 6

Are senior citizens exempt from advance tax?

Accepted Answer

Yes, resident senior citizens (aged 60 years or above) who do not have any income from business or profession are fully exempt from paying advance tax under Section 207. They can pay their entire tax liability as self-assessment tax at the time of filing the return.

Advance Tax Calculator FY 2025-26

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