The term "advance tax" describes income tax that is paid in installments rather than in full at the end of the financial year. Another name for it is "pay as you earn." This article explains how to advantageously pay your advance tax.

What is Advance Tax?

Advance tax is the amount of income tax that should be paid much in advance rather than in one lump sum at the end of the financial year in installments according to the income tax department's due dates. Advance tax, also known as 'pay as you earn' tax, is meant to be paid in the same year as the income is received.

Advance Tax is a portion of your taxes that must be paid before the financial year ends. It must be paid in the year the income is received.

Income tax should be paid in advance rather than in a lump sum at the end of the financial year. It is also known as pay as you go tax. These payments must be made in installments according to the income tax department's due dates.

Who is exempt from paying Advance Tax?

 There is an exception to the payment of Advance Tax if all of the following conditions are met:

      The assessee is a resident senior citizen of india

      He makes no income from his business or profession.

Advance Tax due dates for all assessees


Due Dates

Amount of Advance Tax

Upto 15th June of Previous Year

Upto 15% of Advance Tax Liability

Upto 15th September of Previous Year

Upto 45% of Advance Tax Liability

Upto 15th December of Previous Year

Upto 75% of Advance Tax Liability

Upto 15th March of Previous Year

Upto 100% of Advance Tax Liability


Any tax paid before March 31st is always considered advance income tax. 

An assessee who declares his business or professional income in accordance with the presumptive tax scheme of Section 44AD or Section 44ADA is not required to discharge his advance tax liability in accordance with the aforementioned instalments. He must pay off his entire advance tax liability by March 15th of the previous year. As a result, he can pay the entire advance tax in a single instalment on or before March 15 of the previous year.

Who is Required to File Advance Tax?

 Advance tax is only applicable to those with sources of income other than salary. The salaried employee is not required to pay advance tax because his employer will deduct tax at the source (TDS). However, if he has earned income from sources other than salary, such as interest on fixed deposits or lottery winnings, and his tax liability exceeds Rs 10,000, he must pay advance tax.

      Your tax liability should be at least Rs.10,000.

      You should either be salaried or self-employed.

      Income from capital gains on shares.

      Fixed deposit interest is earned.

      Winnings from the lottery

      Rent or income generated by a house property.


 Both the government and the taxpayers benefit from the provisions relating to payment of advance income tax. The taxpayers benefit because they are relieved of the burden of paying a large sum of money all at once by having the tax collected in manageable installments. The procedure also expedites the collection process and boosts the state fund because the government regularly earns interest on the taxes it collects. The quarterly schedule helps businesses manage their finances systematically and prevents taxpayers from missing income tax payments.