A Guide to Advance Tax Payment in India

Advanced tax is paid by individuals on a second income. The source can be leasing, a lottery win, fixed deposits, referral works, capital gains from equities or freelancing. The tax will be payable if the total amount exceeds ₹10,000 in a fiscal year. This is as per Section 208 of the Income Tax Act, 1961. This scheme was introduced by ex-finance minister Arun Jaitley in Budget 2016-17 after demonetization came into effect. This article gives you a detailed idea of advance tax payment to be able to make an informed choice. Read on.

Who Should Pay Advance Tax?

Taxpayers pay only a share or portion of their tax liability before the end of a year. This is often known as tax EMI due to the instalment flexibility. Ticking off these eligibility criteria makes you liable for advance tax.

  • Tax liability of more than ₹10,000.
  • A self-employed or salaried person.
  • Have earnings from rents and investments.

The advance tax schedule falls under section 44AD. Read on to know how to pay.

Steps for Online Advance Tax Payment

This can be paid instant from the comfort of your home or on the go. Here’s how:

Step 1: Head over to the official website of TIN-NSDL.

Step 2: Choose e-payment from the ‘Services’ section.

Step 3: Select Challan 280a for paying taxes, which is, advance tax.

Step 4: Fill in the relevant information like bank name, email ID, address, phone number and the year of assessment.

Step 5: Enter the CAPTCHA code.

Step 6: Now the screen displays the net banking page of your bank where you can check the tax amount.

The challan number and the payment details will be given once the advance income tax payment is successful. Head over to the paid tax section to update that it has been cleared.

Offline Advance Tax Payment

You can visit authorised banks like RBI, Syndicate Bank, Allahabad, HDFC Bank or ICICI Bank and pay the tax via advance tax challan 280. This is a good idea in case you have doubts that financial advisors can solve on the spot for a seamless payment.

Dates for Instalment Payment

This is also known as the ‘pay as you earn’ scheme. Here’s a look.

StatusBy June 15By Sept 15By Dec 15By March 15
All assesses except eligible assesses as referred to in Section 44AD or section 44ADA.Minimum 15% of advance taxMinimum 45% of advance taxMinimum 75% of advance taxMinimum 100% of advance tax
Taxpayers who opted for the presumptive taxation scheme of Section 44AD or Section 44ADA.NilNilNilMinimum 100% of advance tax

This means:

  • The first instalment of advance tax, which is 15% of the tax liability in advance, will fall due on June 15.
  • The second instalment of advance tax, which is 45% of the tax liability in advance, will fall due on September 15.
  • The third instalment of advance tax, which is 75% of the tax liability in advance, will fall due on December 15.
  • The fourth instalment of advance tax, which is 100% of the tax liability in advance, will fall due on March 15.

Default Payment of Advance Tax

Paying less than the specified amount against the first due or delaying the payment leads to a penalty at the rate of 1% on the remaining tax liability each month. This will be paid under Section 23 4B and Section 23 4C of the Income Tax Act, 1961. But note that if there is a holiday or Sunday on the last tax submission day then you can pay on the following day. Also note that if the Income Tax Department notices that you have paid more than you should, they will reimburse the balance at the end of the year. You can raise a refund request by submitting Form 30.


Senior citizens above the age of 60 do not need to make an advance tax payment if they do not have an income that is chargeable under gains from businesses or profession. Salaried people who come under the TDS net are excused from this tax. Yet it will be applicable to earnings from sources like interests, rents and similar non-salary income.

‘Advance’ tax payment can keep you free of worries. You are less likely to fall behind on tax applications. Businesses, further, can manage their finances properly and get an idea of the income they have earned in a year.

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