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Mastering Advance Tax Payment Online in India (FY 2024-25 & FY 2025-26): Your Complete Guide

  • Writer: Dipali Waghmode
    Dipali Waghmode
  • Jun 20
  • 17 min read

Timely advance tax payment online is quite important for every eligible taxpayer in India. What is advance tax? It's simply a system where individuals and businesses pay their Income Tax liability in installments throughout the Financial Year, much like a 'pay-as-you-earn' model. This guide helps simplify everything about advance tax India, from understanding who needs to pay, how to calculate the amount, to making the pay advance tax payment online without any fuss. It covers the most current rules applicable for the Financial Year (FY) 2024-25 (which corresponds to Assessment Year (AY) 2025-26) and also looks ahead to FY 2025-26 (AY 2026-27). Paying your advance tax correctly helps you stay compliant with the Income Tax laws and, crucially, avoid any potential Penalties. At Taxbuddy, we specialize in making tax compliance straightforward for every Taxpayer.

Table of Content

What is Advance Tax and Why is it Important?

What is advance tax? It means you pay your income tax in parts during the financial year, instead of all at once at the end. The Income Tax Department requires this method for a couple of good reasons. Firstly, it ensures a steady flow of revenue for the Government of India throughout the year, which helps in funding public services. Secondly, it makes it more convenient for taxpayers like you, as you don't have to deal with a huge Tax Liability in one go. The core idea is "pay-as-you-earn"; as you make income, you set aside a portion for taxes. This method of paying tax in Instalments helps manage your finances better. If you don't pay advance tax when you're supposed to, you might have to pay interest on the outstanding amount. The meaning of advance tax is essentially a system of pre-paying your taxes based on your estimated income for the current Financial Year. The importance of advance tax lies in its benefits for both the government and the taxpayer, promoting financial discipline. This system, advance tax explained simply, helps in making tax payments less of a burden.


Section 208 of the Income Tax Act, 1961, clearly states that every person whose estimated tax liability for the year is ₹10,000 or more shall pay advance tax.


Who is Liable to Pay Advance Tax in India? (AY 2025-26 / AY 2026-27)

Figuring out who should pay advance tax is a common question for many taxpayers. Any individual, whether they are Salaried Individuals, Freelancers, Professionals, or run Businesses, needs to pay advance tax if their total estimated tax liability for the Financial Year comes to ₹10,000 or more. Thisadvance tax applicability rule is quite broad. Let's look at specific categories:


  • Salaried Individuals: Often, Tax Deducted at Source (TDS) by employers covers the tax liability on salary income. However, if your TDS is not enough to cover your total tax, or if you have other income sources like rent, interest from savings or fixed deposits, or Capital Gains, you might need to pay advance tax for salaried employees.

  • Freelancers and Professionals: If you are a freelancer or a professional (like a doctor, lawyer, architect etc.), advance tax for freelancers and professionals is applicable if your net tax due is ₹10,000 or more. Those using presumptive taxation schemes under Section 44ADA have slightly different rules for payment.

  • Businesses: All types of businesses, including companies and firms, must pay advance tax if their liability hits the ₹10,000 mark. Businesses that opt for presumptive taxation schemes, such as under Section 44AD, also need to pay advance tax, though their installment schedule is different.

  • Non-Resident Indians (NRIs): NRIs who earn or accrue income in India (like rental income from property in India or capital gains on assets in India) are also required to pay advance tax if their tax liability in India is ₹10,000 or more for the financial year.


There's an important exemption to the advance tax threshold. Advance tax for senior citizens (individuals aged 60 years or more) is not required if they do not have any income from a business or profession. This means if a Senior Citizen's income is only from sources like pension, interest, or rent, they don't need to worry about advance tax. However, if a senior citizen does have business or professional income, they must pay advance tax if their liability meets the threshold.


The Income Tax Act, 1961, provides these specific provisions for liability and exemptions concerning advance tax. It's always a good idea to check your TDS.

Advance Tax Due Dates for FY 2024-25 (AY 2025-26) and FY 2025-26 (AY 2026-27)

Knowing the advance tax due dates is crucial to avoid interest. The Income Tax Department has set a clear advance tax payment schedule for taxpayers. For both Financial Year 2024-25 (Assessment Year 2025-26) and the upcoming Financial Year 2025-26 (Assessment Year 2026-27), the advance tax installments and their respective advance tax last date are as follows for most taxpayers (other than those covered under section 44AD & 44ADA of the Income Tax Act, 1961):


For all assessees (other than those opting for presumptive taxation under Section 44AD & Section 44ADA):

Due Date

Percentage of Advance Tax to be Paid (Cumulative)

On or before 15th June

Not less than 15% of total advance tax

On or before 15th September

Not less than 45% of total advance tax (less tax already paid)

On or before 15th December

Not less than 75% of total advance tax (less tax already paid)

On or before 15th March

100% of total advance tax (less tax already paid)


For assessees covered under the presumptive taxation scheme of Section 44AD & Section 44ADA:

Due Date

Percentage of Advance Tax to be Paid

On or before 15th March

100% of advance tax

It’s good to remember that any tax paid by the 31st of March is also treated as advance tax for that financial year. Keeping this advance tax calendar handy helps ensure timely payments. These due dates are as per the guidelines issued by the Income Tax Department. Last Updated: May 2025


How to Calculate Advance Tax: A Step-by-Step

Learning how to calculate advance taxaccurately is key to meeting your obligations correctly. Here's a straightforward advance tax calculation guide:


Step 1: Estimate total income for the Financial Year. Your advance tax formula starts with estimating your Gross Total Income from all sources for the current FY. This includes salary, income from house property, business or professional income, capital gains (from shares, property, etc.), and income from other sources (like interest from savings accounts, fixed deposits, dividends, etc.).


Step 2: Claim applicable deductions. Next, from your estimated Gross Total Income, you subtract the deductions you are eligible for under Chapter VI-A of the Income Tax Act. These commonly include deductions under Section 80C (for investments like LIC, PPF, ELSS, home loan principal), Section 80D (for health insurance premiums), Section 80TTA (for interest on savings accounts), and others.


Step 3: Arrive at Net Taxable Income. After subtracting the deductions, the figure you get is your Net Taxable Income.


Step 4: Calculate income tax on this Net Taxable Income. Now, apply the applicable Income Tax Slabs to your Net Taxable Income to calculate the tax amount. It's important to consider whether you are opting for the old tax regime or the new tax regime, as the slab rates and available deductions differ significantly between them.


Step 5: Add Surcharge (if applicable) and Health & Education Cess. To the income tax amount calculated in Step 4, add any Surcharge that might be applicable based on your income level. Then, add the Health and Education Cess, which is currently 4% of the tax (plus surcharge, if any).


Step 6: Deduct TDS/TCS already deducted/collected. From the total tax liability computed in Step 5, subtract the amount of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) that has already been deducted or collected during the financial year.


Step 7: The balance is your advance tax liability. The remaining amount is your advance tax liability for the year. If this amount is ₹10,000 or more, you are required to pay advance tax.


Estimating income from sources like capital gains or freelance work can sometimes be tricky because it might be uncertain. For such incomes, you should try to make a reasonable estimate. If the actual income is higher than estimated, you can pay the additional tax in the subsequent installments. For precise calculations, especially when choosing between tax regimes or dealing with complex income sources, you might want to consult a tax expert or use our Income Tax Calculator.


How to Pay Advance Tax Online: Detailed

Making your advance tax payment online is a convenient process through the official Income Tax portal's e-Pay Tax facility, which now uses the TIN 2.0 system. Learning how to pay advance tax online ensures you can fulfill your duty from anywhere. Here’s a step-by-step guide:


Prerequisites:

  • Your Permanent Account Number (PAN).

  • A bank account with net banking facility or a debit card.


Step 1: Visit the Income Tax e-Filing portal. Go to the official website: incometax.gov.in.


Step 2: Navigate to 'e-Pay Tax'. You can usually find the 'e-Pay Tax' option under the 'Quick Links' section on the homepage. You might also find it after logging into your account.


Step 3: Click on 'New Payment'. Once in the e-Pay Tax section, look for and click the 'New Payment' button.


Step 4: Select the 'Income Tax' option. You will see a few boxes for different types of taxes. For advance tax, click on the 'Income Tax' box (it's usually the first one).


Step 5: Select Assessment Year (AY). Choose the correct Assessment Year for which you are paying the tax. For instance, for income earned in Financial Year 2024-25, you would select AY 2025-26.


Step 6: Select 'Type of Payment' as 'Advance Tax (100)'. From the dropdown menu for 'Type of Payment (Minor Head)', select 'Advance Tax (100)'. This is the specific code for advance tax payments.


Step 7: Enter PAN, confirm PAN, and enter Mobile Number. Carefully enter your PAN. You'll need to re-enter it for confirmation. Also, provide your mobile number that is registered with the Income Tax Department or linked to your PAN for receiving an OTP.


Step 8: OTP Verification. You will receive a One-Time Password (OTP) on the mobile number you entered. Enter this OTP to proceed.


Step 9: Fill in the tax details breakup. The system might ask you to enter the breakup of your tax payment (Income Tax, Surcharge, Cess). Often, for advance tax, you can enter the total consolidated amount you intend to pay for that installment in the 'Income Tax' field, and the portal may auto-calculate or simply accept the total. Ensure the amounts are correct.


Step 10: Select Payment Mode. Choose how you want to pay. The common options for e pay advance tax are:


* Net Banking (select your bank from the list).


* Debit Card (enter card details).


* Payment Gateway (this may include options like UPI or credit cards through designated payment gateways).


* Pay at Bank Counter (this option allows you to generate a challan/CRN online and then make the payment in cash, cheque, or demand draft at an authorized bank branch).


Step 11: Preview the challan (CRN generation) and confirm. Before you make the payment, the portal will show you a preview of the challan details with a Challan Reference Number (CRN). Review all the details carefully (PAN, AY, amount, payment type). If everything is correct, confirm to proceed.


Step 12: Make the payment through the selected bank's portal. You will be redirected to your bank's secure payment gateway if you chose Net Banking or Debit Card. Complete the transaction there.


Step 13: Download the Challan Receipt and save it. After successful payment, a challan receipt will be generated. This receipt is very important. It will contain the BSR Code of the bank branch, the Challan Serial Number, the date of deposit, and the amount paid. Download this receipt (usually in PDF format) and save it securely for your records. This receipt is proof of your advance tax challan 280 payment online (though the term Challan 280 is historical, the new system serves the same function).


This guide is based on the latest Income Tax portal interface as of May 2025. The income tax portal advance tax payment system is designed to be user-friendly. If you face issues, you can get help with tax payment.


Understanding Challan 280 for Advance Tax Payment

Many taxpayers are familiar with Challan 280 (also known as ITNS 280). This advance tax payment challan was the traditional form used for paying various direct taxes, including advance tax, self-assessment tax, and tax on regular assessment. While the term ITNS 280 is historical, the current online e-Pay Tax system on the new Income Tax portal achieves the same fundamental purpose: it directs your tax payment correctly to the government account under the right heads. When you make an advance tax payment online now, the system generates a Challan Reference Number (CRN) and a digital challan receipt, which serves as proof of payment.


The key details that were critical for Challan 280 remain crucial in the new system:


  • PAN (Permanent Account Number): Your unique identifier.

  • Assessment Year (AY): The year for which the tax is being paid.

  • Type of Payment (Minor Head Code): For advance tax, this is '100 - Advance Tax'.


So, while you might not physically fill out a "Challan 280" for online payments anymore, understanding what is challan 280 helps appreciate that the new portal streamlines this process digitally, ensuring your tax is correctly attributed.


Interest and Penalties for Non-Payment or Late Payment of Advance Tax

Failing to pay advance tax or paying it late can lead to interest charges under the Income Tax Act, 1961. It’s important to understand these to avoid any advance tax penalty. The two main sections that deal with this are Section 234B and Section 234C.


Section 234C: Interest for deferment/short payment of advance tax installments. Interest under Section 234C is levied if you don't pay the installments of advance tax on time, or if the amount you pay is less than the required percentage by the due dates.


  • If payment by 15th June is less than 15% of the tax due, simple interest at 1% per month is charged for 3 months on the shortfall amount.

  • If payment by 15th September is less than 45% of the tax due, simple interest at 1% per month is charged for 3 months on the shortfall amount.

  • If payment by 15th December is less than 75% of the tax due, simple interest at 1% per month is charged for 3 months on the shortfall amount.

  • If payment by 15th March is less than 100% of the tax due, simple interest at 1% per month is charged for 1 month on the shortfall amount.


Example for Section 234C: Suppose your total advance tax liability is ₹50,000. By 15th June, you should have paid at least 15% (₹7,500). If you paid only ₹5,000, the shortfall is ₹2,500. Interest of 1% for 3 months will apply to ₹2,500. (₹2,500 1% 3 = ₹75).


Section 234B: Interest for non-payment or short payment of advance tax. Interest under Section 234B is levied if the total advance tax paid by the 31st of March is less than 90% of your 'Assessed Tax' (your final tax liability determined after processing your return). Simple interest at 1% per month (or part of a month) is charged on the difference between the Assessed Tax and the advance tax paid. This interest is calculated from the 1st of April of the Assessment Year until the date you actually pay the tax.


Example for Section 234B: Your Assessed Tax for FY 2024-25 (AY 2025-26) is ₹1,00,000. You paid total advance tax of ₹70,000 by March 31st, 2025. Since ₹70,000 is less than 90% of ₹1,00,000 (which is ₹90,000), Section 234B interest applies. The shortfall is ₹30,000 (₹1,00,000 - ₹70,000). If you pay this balance on July 31st, 2025, interest at 1% per month for 4 months (April, May, June, July) will be charged on ₹30,000. (₹30,000 1% 4 = ₹1,200).


Understanding the advance tax interest calculation can be a bit complex. If you receive any tax notices related to interest, you can seek help with tax notices. Consult Taxbuddy experts to understand specific interest calculations for your case.


Benefits of Paying Advance Tax Online and On Time

There are several good benefits of advance tax payment made accurately and punctually. Knowing why pay advance tax on time can motivate you to stay compliant.


  • Avoids interest and penalties: This is a big one. Timely payment helps you steer clear of interest charges under sections 234B and 234C.

  • Manages cash flow better: Paying tax in installments throughout the year is much easier on your wallet than a large, lump-sum payment at year-end. It helps in better Cash Flow management.

  • Ensures Tax Compliance: It keeps you on the right side of the tax laws, demonstrating that you are a responsible taxpayer.

  • Reduces last-minute stress: When the tax filing season arrives, you'll have less to worry about if your advance tax is already paid. This makes filing your Income Tax Return (ITR) smoother.

  • Facilitates smoother processing of ITR and refunds: Correct and timely advance tax payments can lead to quicker processing of your income tax return and any refunds you might be due.

  • Contributes to national development: Your timely tax payments provide a steady stream of revenue to the government, which is used for public services and the nation's development.


These advantages of paying advance tax highlight its importance for both personal financial health and fulfilling civic duties.


Special Considerations for Advance Tax

There are some specific scenarios where understanding advance tax nuances is helpful.


  • Advance Tax on Capital Gains: How do you pay advance tax on capital gains if they occur unexpectedly during the year? The Income Tax Act acknowledges that it's not always possible to estimate capital gains accurately in advance. If you realize capital gains after an advance tax installment due date has passed, you should pay the tax due on such gains in the next available installment. If all installment dates have passed, you should pay it by March 31st of the financial year. If you need to work out the tax on these gains, you can calculate capital gains tax.

  • Advance Tax for Presumptive Income (Sections 44AD/44ADA): If you've opted for the advance tax presumptive scheme under Section 44AD (for businesses) or Section 44ADA (for professionals), the rule is simpler. You need to pay the entire amount of your advance tax liability in a single installment on or before the 15th of March of the financial year. You also have the option to pay by 31st March.

  • Revising Advance Tax Payments: Can you revise advance tax installments? Yes. If your income estimate changes during the year (either increases or decreases), you can adjust the amount you pay in the subsequent advance tax installments accordingly.

  • Advance Tax Refund: What happens if you end up paying more advance tax than your actual tax liability for the year? You can claim an advance tax refund when you file your Income Tax Return (ITR) for that year. The excess amount paid will be refunded to you by the Income Tax Department, potentially with interest if applicable.

  • Impact of Old vs. New Tax Regime: Your choice between the Old Tax Regime and the New Tax Regime significantly impacts your tax calculation, and therefore, your advance tax liability. The slab rates, deductions, and exemptions differ. You need to decide which regime is more beneficial for you at the beginning of the financial year (or when estimating income) to calculate your advance tax accurately.


Post Advance Tax Payment: What Next?

Successfully making an advance tax payment is a key step, but there are a few things to do afterwards to ensure good tax hygiene.


  • Record Keeping: It is very important to save your challan receipts. After after advance tax payment, the receipt contains vital details like the BSR Code, Challan Serial Number, date of payment, and the amount. Keep a digital or physical copy safe, as this is your proof of payment.

  • Verification: You should check advance tax payment status to ensure it has been successfully processed and credited. You can do this on the Income Tax portal (incometax.gov.in) by looking at your payment history or sometimes through the TIN NSDL portal using the Challan Identification Number (CIN) if applicable.

  • Reporting in ITR: When you file your Income Tax Return (ITR), you need to report the details of all the advance tax payments you've made during the financial year. The advance tax in ITR section allows you to claim credit for these payments against your total tax liability.

  • Checking Form 26AS/AIS: Your advance tax in Form 26AS (your annual tax statement) and the Annual Information Statement (AIS) should correctly reflect the payments you've made. It's good practice to check these documents a few days after your payment to confirm the details. You can access these by logging into the Income Tax Portal Login.


Following these post-payment steps ensures your tax records are accurate and helps in a smooth ITR filing process. When it's time, you can file your income tax return with all this information readily available.


Troubleshooting Common Advance Tax Payment Issues

Sometimes, taxpayers might face advance tax payment issues while trying to pay online. Here are some common problems and what you can generally do:


  • Payment failed but amount debited from Bank Account: This can be unsettling. Usually, if the advance tax payment failed but your account was debited, the amount is either credited to the government and a challan is generated later (check status after some time), or it's reversed back to your bank account within a few working days. You should contact your bank first to confirm the transaction status from their end.

  • Challan not generated after payment: If payment is successful but the advance tax challan not generated immediately, wait for some time. Sometimes there are delays in generation. You can check the payment status on the Income Tax portal. If it still doesn't appear, and the amount is debited, you may need to contact the bank or the Income Tax Department's helpdesk.

  • Incorrect AY or PAN entered in challan: Entering the wrong Assessment Year or PAN can lead to problems. For some limited fields in a challan, a advance tax correction facility might be available on the portal for a short period after payment. Always double-check these details before confirming the payment. If a major error occurs, resolving it can be complex and might require specific procedures outlined by the department.

  • Website slow or unresponsive during peak times: The Income Tax portal can experience heavy traffic, especially near due dates. Try accessing the website during off-peak hours if you face slowness. Plan your payment a few days before the last date to avoid this.

  • Unable to find specific bank in the net banking list: The portal lists authorized banks for direct net banking payments. If your bank isn't listed, you might need to use the 'Payment Gateway' option (which could include your bank via a third-party gateway) or the 'Pay at Bank Counter' option to generate a challan and pay physically at an authorized bank.


If you encounter persistent problems, it's advisable to contact Taxbuddy support or the Income Tax Department's official helpdesk.


Conclusion

This guide has aimed to provide a clear understanding of advance tax summary points. Mastering your advance tax liability involves knowing if you need to pay, calculating it correctly, and making timely pay advance tax online easily using the government portal. This proactive approach to Tax Compliance is essential not only to avoid tax penalties and interest but also for better Tax Planning and financial management. The process, especially with the new online portal, is designed to be more taxpayer-friendly.


Remember to set calendar reminders for the due dates to ensure you don't miss them. Staying organized with your income and deduction details throughout the year will make the estimation process much smoother.


Need help with your advance tax? Contact Taxbuddy experts today! or Use Taxbuddy's Advance Tax Calculator for easy estimation.


FAQ

1. Can I pay advance tax after the due date?

Yes, you can pay advance tax after the due date, but interest will be charged under Sections 234B and 234C for the delay.


2. Is advance tax applicable if I only have salary income? Generally, TDS covers salary income. However, advance tax is applicable if the TDS is short or if you have other sources of income.


3. How is advance tax different from self-assessment tax? Advance tax is paid in installments throughout the year based on estimated income, while self-assessment tax is paid after filing the return to cover any remaining tax liability.


4. What if I miss one installment of advance tax? If you miss one installment, you can pay it with the next installment. However, interest will apply for the delay under Section 234C.


5. Can I pay advance tax for multiple years at once? No, advance tax payments are assessment year (AY) specific, so you cannot pay for multiple years at once.


6. Do I need to submit the advance tax challan physically anywhere? No, if you pay advance tax online, there is no need to submit the challan physically. Just keep a digital record of the payment.


7. What happens if I pay less advance tax than my actual liability? If you pay less advance tax than your actual liability and the shortfall is greater than 10%, you will incur interest under Section 234B.


8. What if I pay more advance tax? If you overpay advance tax, you can claim a refund while filing your Income Tax Return (ITR).


9. Is there a minimum amount for each advance tax installment? There is no fixed minimum amount for each advance tax installment. However, the cumulative percentages for each installment (15%, 45%, 75%, and 100%) must be met by the respective due dates.


10. How to pay advance tax for income from shares/mutual funds? For income from shares or mutual funds, estimate your capital gains and pay advance tax accordingly based on your expected taxable gains.


11. Can a student be liable for advance tax? A student can be liable for advance tax if their income exceeds the basic exemption threshold, such as income from freelancing or other sources.


12. What is the code for advance tax payment in Challan 280? The code for advance tax payment in Challan 280 is Minor Head Code 100.


13. Can I use a credit card to pay advance tax? Yes, you can use a credit card to pay advance tax through the payment gateway options available on the portal, though bank charges may apply.


14. How does the new TIN 2.0 system affect advance tax payment? The new TIN 2.0 system streamlines the tax payment process by offering improved tracking and updating of taxpayer details, ensuring easier advance tax payments.


15. Where can I find my paid advance tax details for ITR filing? You can find your paid advance tax details in your challan receipts, Form 26AS, or the Annual Information Statement (AIS).


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