Advance Tax Payment 2025: Due dates, rules, who needs to pay | Everything you need to know

Advance Tax is the tax paid before the end of the financial year. At the start of the financial year, taxpayers estimate their annual income and pay taxes through multiple instalmentsif the tax on such income exceeds Rs 10,000.

What is advance tax?

The advance income tax is filed before the financial year. It is paid through several instalments before the end of the financial year. Instead of a lump sum payment at the end of the financial year, these are paid before filing the income tax returns. The provisions related to advance tax are covered under Sections 207 to 219 of the Income Tax Act. Taxpayers are required to make paymentsin four instalments.

Who should pay advance payments?

Taxpayers whose estimated tax liability exceeds Rs 10000 should pay advance tax. It includes salaried individuals, freelancers and business owners. People aged 60 who don't earn income from a business or profession are exempt from paying advance tax.

The due date for advance tax payments for FY 2025-26 are:

1. First Instalment on or before 15th June 2025 -- 15% of tax liability.

2. Second Instalment on or before 15th September 2025 -- 45% of tax liability minus advance tax already paid.
3. Third Instalment on or before 15th December 2025 - 75% of tax liability minus advance tax already paid.
4. Fourth Instalment On or before 15th March 2026 100% of tax liability minus advance tax already paid.

Calculating Advance Tax in India: A Step-by-Step Guide

1. Assess Current Income: Consider income from all sources for the financial year, comparing with previous years. Account for new income like capital gains and gratuity redemption.
2. Eligible Deductions and Exemptions: Include tax-saving investments and deductions like:
- Medical insurance premium
- Home loan interest and principal repayment
- HRA (House Rent Allowance)
- Donations
- Start-up deductions
- Capital gain exemptions
3. Estimate Taxable Income: Calculate total taxable income based on income and deductions.
4. Determine Tax Liability: Use a tax calculator to find the most beneficial tax regime (old vs new). If total tax liability exceeds ₹10,000 for the financial year, advance tax is required.
5. Pay Advance Tax Instalments: Pay required percentages of tax liability by due dates. You can revise estimates if income changes during the year.

How to make an advance tax payment online? Step-by-step guide

1. Log on to the e-filing portal of the Income Tax Department of India. Access e-Pay Tax: On the homepage, find 'Quick Links' > click 'e-Pay Tax'. Or search 'e-Pay Tax' in the search bar.
2. Enter Details: Input PAN (confirm by re-entering), mobile number > click 'Continue'.
3. Verify OTP: Enter 6-digit OTP received on mobile > 'Continue'.
4. Select Tax Type: Choose 'Income Tax' > 'Proceed'.
5. Payment Details: Select Assessment Year (e.g., 2026-27), Type of Payment: 'Advance Tax (100)' > 'Continue'.
6. Enter Tax Details: Fill in the required tax information.
7. Choose Payment Method: Select bank and payment method > 'Continue'.
8. Preview and Pay: Check challan details > 'Pay Now' (or 'Edit' if needed).
9. Acknowledgement: Post-payment, note the BSR code and challan serial number from the acknowledgement screen.