Detailed Explanation
How it works
It applies when net tax liability is Rs.10,000 or more, payable 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March. Shortfalls attract interest under Sections 234B and 234C.
Who pays, and when
Anyone whose tax liability after TDS exceeds Rs.10,000 for the year: 15% by 15 June, 45% by 15 September, 75% by 15 December, 100% by 15 March (cumulative). Presumptive taxpayers under 44AD/44ADA pay the whole amount by 15 March. Resident senior citizens with no business income are exempt (Section 207).
Worked example
Estimated FY 2026-27 liability Rs.5,00,000 after TDS: pay Rs.75,000 by June, Rs.1,50,000 more by September (cumulative Rs.2,25,000), Rs.1,50,000 more by December (Rs.3,75,000), and Rs.1,25,000 by March. A June shortfall of Rs.15,000 costs 234C interest of Rs.450 (1% × 3 months); missing the 90% mark for the year triggers 234B at 1% per month from 1 April until payment — the interest that quietly compounds through a late filing season.
Estimation protections
The 12%/36% safe harbours soften the June/September instalments, and capital gains, dividends and winnings are protected from retrospective 234C — pay in the instalment after the income arises. Recompute at every instalment against actual TDS credits in 26AS, and remember payments until 31 March still count as advance tax for the 90% test. Under the Income-tax Act 2025 the machinery continues with interest provisions renumbered as Sections 432-434.
Frequently asked questions
Who must pay advance tax?
Any taxpayer whose net tax liability after TDS is Rs.10,000 or more in a year.
What are the advance tax dates?
15/45/75/100% by 15 June, 15 September, 15 December and 15 March.
This content is for general guidance only and does not constitute professional advice. Tax law changes frequently — verify the current position and consult a qualified Chartered Accountant before acting. Last reviewed: June 2026.