Advance tax is income tax paid in instalments during the year you earn the income, rather than in one lump sum at filing time. It applies when your estimated tax liability for the year, after TDS, is ₹10,000 or more. Regular taxpayers pay four instalments across June, September, December and March; presumptive taxpayers pay once by 15 March.
The standard schedule requires 15% of the year's estimated tax by 15 June, 45% cumulatively by 15 September, 75% by 15 December and 100% by 15 March. You estimate income for the full tax year, compute tax, subtract TDS already deducted on your receipts, and pay the balance in these proportions. Estimates can be revised at each instalment as the year's picture becomes clearer — early instalments are not locked in.
For MSME owners the discipline is quarterly: pull a profit estimate from your books before each due date, check TDS credits in 26AS, and pay the shortfall online against the correct tax year. Presumptive taxpayers under section 58 get the simplest deal — one instalment covering the full liability by 15 March. Capital gains and windfalls are handled by paying in the remaining instalments after the gain arises.
Miss or underpay and interest applies under sections 423 to 425 of the 2025 Act (the old 234A/B/C). The interest is not a penalty you can argue away — it accrues mechanically, typically 1% per month on the shortfall. The classic mistake is ignoring advance tax because "TDS covers me", then discovering rental, interest or capital gains income pushed the net liability past ₹10,000.
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Reviewed to the law in force in FY 2026-27. General information, not advice — confirm the position for your facts before acting.