ESTIMATED TAX PAYMENTS (India – FY 2024–25)

If you earn income that is not subject to Tax Deducted at Source (TDS) — such as:

• Interest from fixed deposits or savings

• Rental income

• Freelancing or self-employment income

• Capital gains (sale of shares, mutual funds, property)

• Dividend income

• Lottery or prize winnings

…you may be liable to pay Advance Tax, also known as Estimated Tax.

Advance tax applies when your total tax liability for the financial year exceeds ₹10,000 after accounting for TDS and tax credits

HOW TO CALCULATE ESTIMATED TAX

To compute advance tax, you need to estimate your annual taxable income, then:

1. Calculate total gross income (salary + business/profession + other sources)

2. Subtract eligible deductions under sections like 80C, 80D, etc.

3. Apply the applicable income tax slab rates

4. Subtract TDS, TCS, and any rebates (e.g., under section 87A)

5. If tax liability exceeds ₹10,000, advance tax must be paid

Use last year’s tax return and current income trends as a reference.

WHO SHOULD PAY ADVANCE TAX

Advance tax must be paid by:

• Self-employed professionals and freelancers (e.g., doctors, consultants)

• Business owners

• Individuals earning substantial interest, capital gains, rental income, or dividends

• Salaried employees with inadequate TDS or additional income sources

• Senior citizens (aged 60 or above) with business/professional income

Note: Senior citizens without business income are exempt from paying advance tax.

DUE DATES FOR ADVANCE TAX IN INDIA

Advance tax is paid in four instalments during the financial year:

Due Date	Minimum % of Tax to be Paid
15th June	15%
15th September	45% (cumulative)
15th December	75% (cumulative)
15th March	100% (cumulative)

HOW TO PAY ADVANCE TAX

You can pay advance tax through:

• The Income Tax Department portal: https://www.incometax.gov.in

• Online via Net banking (select “Advance Tax” under Challan 280)

• Offline at authorised bank branches using Challan 280

Once paid, verify the payment in your Form 26AS or AIS (Annual Information Statement).

PENALTY AVOIDANCE TIPS

To avoid interest or penalty:

• Ensure timely and accurate payments

• Use tools like income tax calculators or consult a CA

• Consider TDS and advance tax while planning cash flows

Advance tax payments are mandatory to help the government collect revenue throughout the year — and non-compliance can cost you in penalties.