5 Things to Check Before Paying Advance Tax
Three out of four advance tax payers overpay or underpay because they skip a quick check. Run through your income, deductions, TDS already paid, and the exact installment percentage before clicking pay.
Three out of four salaried Indians who pay advance tax overpay or underpay it because they skip a 10-minute check. Income tax India rules give you four windows during the year to settle the bill, and each missed deadline triggers interest under sections 234B and 234C. A quick checklist before you click pay protects you from both penalties and over-funding the government for free.
Why the pre-payment check matters for income tax India filers
Advance tax is not a one-time event. It is paid in four installments: 15 percent by 15 June, 45 percent by 15 September, 75 percent by 15 December, and 100 percent by 15 March. Pay too little and you owe interest. Pay too much and you have given an interest-free loan to the tax department for months.
The check below takes ten minutes. Done right, it saves you from both ends of the trap.
1. Confirm your total expected income for the year
Add up every taxable rupee you expect from April to March. That includes salary, freelance income, interest from fixed deposits, capital gains booked so far, rental income, and dividends.
Most people forget the small stuff. Interest from a savings account above 10,000 rupees is taxable. Sold some mutual funds in July? That gain belongs on this list. A short FD that matured in May counts too.
Underestimating income is the single most common reason taxpayers get a notice asking for interest at year-end.
2. Subtract every deduction you actually qualify for
Deductions reduce taxable income, not tax owed directly. Walk through each section that applies to you:
- Section 80C: EPF, PPF, ELSS, life insurance premium, home loan principal, kids' tuition. Cap is 1.5 lakh rupees.
- Section 80D: Health insurance premium for self, spouse, kids, and parents.
- Section 24: Home loan interest up to 2 lakh rupees on a self-occupied house.
- Standard deduction: 50,000 rupees flat for salaried filers.
- HRA, LTA, NPS contribution: If your employer offers them.
Many people pay advance tax on gross income and forget the deductions entirely. That can mean overpaying by 30,000 to 80,000 rupees per quarter.
2a. Pick the right tax regime
The new regime has lower rates but almost no deductions. The old regime has higher rates but lets you claim 80C, HRA, and home loan interest. Run both numbers before paying advance tax. The wrong choice for your profile can cost a full month's salary across the year.
3. Account for TDS already deducted
Salaried filers usually have most of their tax deducted at source by the employer. If your TDS already covers your liability, you may not owe advance tax at all. The threshold to pay advance tax is when your total tax due after TDS exceeds 10,000 rupees in the year.
Pull your Form 26AS from the income tax portal before each installment. It shows TDS deducted by the employer, by the bank on FD interest, and by mutual funds on dividend payouts. Subtract this from your total tax estimate.
4. Confirm the installment percentage and deadline
| Due date | Cumulative percentage | Section 234C interest if missed |
|---|---|---|
| 15 June | 15 percent | 1 percent per month for 3 months |
| 15 September | 45 percent | 1 percent per month for 3 months |
| 15 December | 75 percent | 1 percent per month for 3 months |
| 15 March | 100 percent | 1 percent for 1 month |
The interest under section 234C is 1 percent per month on the shortfall. Section 234B kicks in if you pay less than 90 percent of total tax by 31 March. Together, they can add 5 to 10 percent on top of the tax you already owe.
5. Verify your PAN, assessment year, and bank channel
The most embarrassing mistake is paying advance tax against the wrong assessment year. For income earned in 2025-26, the assessment year is 2026-27. Pick the wrong year on the challan and the payment lands in the wrong bucket.
Use the official portal at incometax.gov.in for challan ITNS 280. Pay through net banking from a bank empanelled with the department. Save the BSR code, challan number, and date. You will need them at filing time in July.
Commonly missed items that catch filers off guard
- Capital gains from selling property or shares in the last quarter often slip through. Add them before the 15 March cut-off.
- Dividend income above 5,000 rupees from any single company is now fully taxable.
- Crypto and other virtual digital asset gains are taxed at 30 percent flat. Add them to your advance tax estimate.
- Surcharge if your total income crosses 50 lakh rupees in the year.
- Cess of 4 percent on the total tax. People forget to add it and underpay by exactly that much.
Frequently Asked Questions
Who has to pay advance tax in India?
Anyone whose tax liability after TDS exceeds 10,000 rupees in the year. Salaried filers with no extra income usually do not need to pay separately.
What happens if I miss the 15 June installment?
Interest at 1 percent per month under section 234C applies on the shortfall for three months, even if you catch up by 15 September.
Can senior citizens skip advance tax?
Yes. Resident senior citizens aged 60 or above with no income from business or profession are exempt from paying advance tax.
Frequently Asked Questions
- Who has to pay advance tax in India?
- Anyone whose total tax liability after TDS exceeds 10,000 rupees in the year. Salaried filers with no extra income usually do not need to pay separately.
- What happens if I miss the 15 June installment?
- Interest at 1 percent per month under section 234C applies on the shortfall for three months, even if you catch up by the next due date.
- Can senior citizens skip advance tax?
- Yes. Resident senior citizens aged 60 or above with no income from business or profession are exempt from paying advance tax.
- Where do I check my TDS before paying advance tax?
- Download Form 26AS or the Annual Information Statement from the income tax portal. Both show all TDS credited against your PAN.
- What is the difference between 234B and 234C interest?
- 234C is interest for missing quarterly deadlines. 234B is interest if your total advance tax paid is less than 90 percent of the final tax by 31 March.