A Salaried Person’s Guide to Advance Tax in India

Is Advance Tax Applicable to You? (The Rs. 10,000 Rule)

You get a paycheck. Your employer handles the taxes, right? Not always. If you’re a salaried employee in India, your Tax Deducted at Source (TDS) covers your salary, but it doesn’t touch the extra cash. Capital gains from stocks, rent from a property, income from freelancing, or even interest from your savings – all of these can trigger an advance tax liability.

Here’s the deal: If your total tax bill hits ₹10,000 or more after your employer’s TDS, you’re on the hook for advance tax. This means you pay taxes on that extra income as you earn it, throughout the year.

How to Calculate Your Advance Tax

It’s simple. Here’s how to figure out if you owe:

1. Estimate Total Income: Add up your salary and any other income you expect to see this financial year.
2. Calculate Total Tax: Use the latest income tax slab rates to figure out the total tax on your estimated income.
3. Deduct TDS: Subtract the total TDS your employer will withhold from your salary.
4. Check the Threshold: If what’s left is more than ₹10,000, you pay advance tax.

The Four Due Dates You Can’t Miss

Advance tax isn’t a one-time thing. You pay in installments throughout the year. Mark these dates on your calendar:

• By June 15th: Pay 15% of your total advance tax.
• By September 15th: Pay 45% of your total advance tax.
• By December 15th: Pay 75% of your total advance tax.
• By March 15th: Pay 100% of your total advance tax.

How to Pay Online (A Simple 4-Step Process)

The government makes it easy to pay online. Here’s how:

1. Visit the Portal: Head to the official Income Tax Department’s e-filing portal.
2. Select e-Pay Tax: Find and click the “e-Pay Tax” service. You’ll need your PAN and mobile number.
3. Choose Payment Type: Select the Assessment Year (like 2026-27 for FY 2025-26) and choose “Advance Tax” as the payment type.
4. Complete Payment: Pick your bank and pay. Don’t forget to download and save the challan (receipt) as proof.

What Happens If You Miss the Deadline?

Miss a deadline? You’ll pay. The Income Tax Act slaps on penalties under sections 234B and 234C for late or short payments. Those penalties can quickly balloon your tax bill, so pay on time.

Your Next Step

Don’t let your side hustle become a tax headache. Take a few minutes to calculate your potential liability today. For more tax-saving tips, sign up for our newsletter.