1. Overview
Under Section 210(1) of the Income Tax Act, 1961, taxpayers liable for advance tax must voluntarily calculate and pay their estimated tax liability in instalments during the financial year. This applies when:
- The tax liability (after TDS/TCS) exceeds ₹10,000.
- The taxpayer is not exempt(e.g., senior citizens without business income).
2. Key Provisions
(A) Self-Calculation of Advance Tax
- Estimate Current Income: Project total income (salary, business, capital gains, etc.) for the financial year.
- Compute Tax Liability: Apply applicable tax rates (including cess).
- Adjust for TDS/TCS: Deduct taxes already deducted/collected at source.
- Check Threshold: Pay advance tax only if the balance exceeds ₹10,000.
(B) Payment in Instalments
Advance tax must be paid in 4 instalments as per Section 211:
| DUE DATE | % OF TAX PAYABLE (CUMULATIVE) |
| 15th June | 15% |
| 15th September | 45% |
| 15th December | 75% |
| 15th March | 100% |
Example: If the total advance tax liability is ₹1,00,000:
- 15th June: ₹15,000
- 15th Sept: ₹30,000 (₹45,000 – ₹15,000 paid earlier)
- 15th Dec: ₹30,000 (₹75,000 – ₹45,000)
- 15th March: ₹25,000 (remaining balance).
3. Flexibility in Payment
- Revise Estimates: If income changes, taxpayers can increase or reducesubsequent instalments (Section 210(2)).
- No formal intimationto the tax department is required for revisions.
- Late Payments: Any payment after 31st March is not treated as advance taxfor that FY.
4. Penalties for Non-Compliance
- Interest under Section 234B: 1% per month if <90% of tax is paid by 31st March.
- Interest under Section 234C: 1% per month for deferred instalments.
5. Special Cases
- Presumptive Taxation (Sections 44AD/44ADA): Full payment by 15th March.
Corporate Taxpayers: Must pay electronically
