Advance tax applies if annual tax liability exceeds ₹10,000. Senior citizens (75+) with only pension and interest income are exempt. Self-employed, freelancers, and investors must pay advance tax.
Income Details (FY 2025-26)
Total Annual Tax Liability
₹0
FY 2025-26 (new regime)
Advance Tax — Key Questions
Who must pay advance tax in India?+
Any individual whose estimated total tax liability for the year exceeds ₹10,000 must pay advance tax. This includes self-employed individuals, freelancers, consultants, investors with capital gains, rental income earners, and salaried employees with large other income. TDS deducted by employers counts toward advance tax — only the shortfall needs separate payment.
What penalty applies for non-payment of advance tax?+
Section 234C: 1% per month simple interest on the shortfall in each instalment. Section 234B: 1% per month interest if total advance tax paid is less than 90% of the total liability. These penalties can be significant — a ₹2L tax liability where you paid nothing can attract ₹8,000-12,000 in interest. Always pay on time.