As the financial year 2024-25 nears its end, taxpayers must ensure they meet their advance tax obligations. The due date for the fourth and final installment of advance tax is 15th March 2025. Here’s a detailed guide to understanding advance tax, its applicability, calculation, and payment procedure to help you stay compliant with tax regulations.
What is Advance Tax?
Advance tax is the income tax paid in advance rather than in a lump sum at the end of the financial year. It follows the principle of “pay as you earn,” ensuring that taxpayers contribute to their tax liabilities periodically.
Who Should Pay Advance Tax?
Advance tax applies to various taxpayers, including:
- Salaried individuals, freelancers, and businesses: If your total tax liability is Rs. 10,000 or more in a financial year, you must pay advance tax.
- Senior citizens (aged 60 years or more): Exempt from paying advance tax if they do not run a business.
- Presumptive income taxpayers under Section 44AD (businesses) and Section 44ADA (professionals): Must pay the entire tax in one installment by 15th March. They also have the option to pay by 31st March.
Advance Tax Due Dates for FY 2024-25
| Due Date | Advance Tax Payment Percentage |
| 15th June 2024 | 15% of advance tax |
| 15th September 2024 | 45% of advance tax (-) tax paid earlier |
| 15th December 2024 | 75% of advance tax (-) tax paid earlier |
| 15th March 2025 | 100% of advance tax (-) tax paid earlier |
For taxpayers under the Presumptive Taxation Scheme:
| Due Date | Advance Tax Payment Percentage |
| 15th March 2025 | 100% of advance tax |
How to Calculate Advance Tax?
Follow these steps to compute your advance tax liability:
- Estimate your total income from all sources (salary, business income, capital gains, rent, interest, etc.).
- Deduct eligible exemptions and deductions (under Section 80C, 80D, etc.).
- Calculate tax liability based on the applicable tax slab rates.
- Subtract any TDS/TCS deducted on your income.
- If the remaining tax liability exceeds Rs. 10,000, advance tax must be paid.
Example of Advance Tax Calculation
Ajay, a freelancer, estimates the following income for FY 2024-25:
| Income Estimation | Amount (Rs) |
| Gross receipts | 20,00,000 |
| Less: Expenses | 12,00,000 |
| Net Income | 8,00,000 |
| Interest Income | 10,000 |
| Total Income | 8,10,000 |
Tax Calculation
| Details | Amount (Rs) |
| Deductions (PPF, LIC, medical insurance) | 77,000 |
| Taxable Income | 7,33,000 |
| Tax Payable | 59,100 |
| Add: Cess (4%) | 2,364 |
| Total Tax | 61,464 |
| Less: TDS | 30,000 |
| Advance Tax Payable | 31,464 |
Advance Tax Payment Schedule
| Due Date | Tax Payable (Rs) |
| 15th June 2024 | 4,700 |
| 15th September 2024 | 9,400 |
| 15th December 2024 | 9,400 |
| 15th March 2025 | 7,900 |
How to Pay Advance Tax Online?
- Visit the Income Tax e-filing portal.
- Click on ‘e-Pay Tax’ under ‘Quick Links’.
- Enter PAN, mobile number, and OTP verification.
- Select ‘Income Tax’ and proceed.
- Choose Assessment Year 2025-26 and Advance Tax (100).
- Enter the tax amount and select the payment method.
- Review and complete payment.
- Save the acknowledgment receipt containing the BSR code and challan serial number.
Interest on Late Payment of Advance Tax
- Section 234B: If advance tax paid is less than 90% of total tax liability by 31st March, interest @ 1% per monthis levied.
- Section 234C: If advance tax is not paid as per due dates, interest @ 1% per month applies for delayed payments.
| Scenario | Interest Rate | Period | Amount Considered |
| Advance tax paid by 15th June < 15% | 1% per month | 3 months | 15% of total tax (-) tax paid |
| Advance tax paid by 15th September < 45% | 1% per month | 3 months | 45% of total tax (-) tax paid |
| Advance tax paid by 15th December < 75% | 1% per month | 3 months | 75% of total tax (-) tax paid |
| Advance tax paid by 15th March < 100% | 1% per month | 1 month | 100% of total tax (-) tax paid |
Final Thoughts
With 15th March 2025 fast approaching, ensure you pay your advance tax on time to avoid penalties and interest. Paying advance tax helps in spreading tax liabilities across the year, reducing the burden of a lump sum payment at the year-end. Use online facilities for hassle-free payments and stay compliant with tax laws.
For expert assistance in calculating and paying your advance tax, consider consulting a Chartered Accountant or using online tax filing platforms.
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