Income Tax · Glossary
Advance Tax
Income tax paid in quarterly instalments during the financial year itself — before filing the ITR.
Advance tax, mandated under Sections 207–209 of the Income Tax Act, 1961, is the mechanism by which taxpayers whose estimated annual tax liability exceeds Rs. 10,000 pay tax in four instalments during the financial year rather than in a lump sum at filing time. The instalment schedule for FY 2026-27:
- 15% by 15 June 2026
- 45% by 15 September 2026
- 75% by 15 December 2026
- 100% by 15 March 2027
Single-instalment exception: taxpayers under the presumptive schemes (44ADA, 44AD) need only pay 100% by 15 March — the first three instalments are waived under the proviso to Section 234C(1). Missing instalments attracts interest under Section 234C (1% per month for 3 months on the shortfall at each deadline); failing to pay at least 90% in total attracts Section 234B interest from 1 April of the assessment year.
Worked example
Arjun (44ADA, Rs. 30L gross → Rs. 15L deemed profit) owes advance tax of roughly Rs. 1.05L. As a presumptive taxpayer he pays the entire Rs. 1.05L by 15 March 2027 — no June/Sep/Dec instalments required.
Practitioner tip
Estimate your advance tax liability conservatively using the first-half receipts — overpaying is refunded at ITR with 6% interest under Section 244A. Underpaying by more than 10% of assessed tax triggers 234B interest starting 1 April of the AY.
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HourSlip calculates your advance tax schedule automatically →Related glossary terms
- Section 234B Interest — Interest payable when advance tax paid is less than 90% of assessed tax.
- Section 234C Interest — Interest on shortfall in any of the four advance tax instalments.
- Section 44ADA — Presumptive taxation scheme for specified professionals — 50% of gross receipts is deemed profit.
- ITR-4 (Sugam) — Income tax return form for individuals on presumptive taxation (44AD/44ADA/44AE).
Sources
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These definitions are educational. Tax laws change annually — verify with a Chartered Accountant before making GST or income-tax decisions.