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Gather the required inputs
Collect age as of 1 April of the assessment year, the nature of each income stream (business/profession, capital gains, salary, rental, other), whether the client has elected presumptive taxation, estimated total income for the year, the tax regime chosen, TDS and TCS already deducted or expected, and any brought-forward losses or unabsorbed depreciation. Do not compute anything until these are known.
Test whether advance tax is due
Estimate current-year total income, compute tax plus surcharge and cess, then subtract TDS and TCS credits. If the net liability is below the statutory threshold, stop: no advance tax is due.
Watch for: The threshold is measured on NET tax after TDS/TCS, not gross; the statute says the liability must exceed the threshold, so at exactly the threshold amount nothing is due.
Income-tax Act 1961, ss. 207-208
Route to the correct path: exempt, presumptive, or regular
Check the senior-citizen exemption and the presumptive election before scheduling. A resident aged 60+ with NO business or professional income is exempt. Confirm whether the client falls under s. 44AD or s. 44ADA, which replaces the four-installment schedule with a single installment.
Every figure is drawn from this Tax Guide and cited to its source.
Reviewer note
Reviewed against the cited tax authorities by Mayur Deokar on 2026-06-06. Items flagged for further clarification are tracked separately and excluded here. This block is generated from verified skill_facts — edit the facts, not the prose.
15 September — 2nd
45% cumulativeITA s 211
15 December — 3rd
75% cumulativeITA s 211
15 March — 4th
100% cumulativeITA s 211
Instalment
Single payment by 15 March (100%)ITA s 211(1)(b)
Exempt if
Resident 60+, NO business/professional incomeITA s 207
NOT exempt if
Senior WITH business/professional incomeITA s 207
Tax applicable code
0021 (IT — Other than Companies)ITNS 280
Type of payment code
100 (Advance Tax)ITNS 280
Read this whole section before computing anything.
Quick reference field table
| Field | Value |
|---|---|
| Country | India |
| Jurisdiction Code | IN |
| Primary Legislation | Income-tax Act, 1961, Sections 207-211 (advance tax liability and computation); Sections 234B, 234C (interest on default/deferment) |
| Supporting Legislation | Income-tax Act, 1961, s. 44AD, s. 44ADA (presumptive taxation); s. 190-194 (TDS provisions); Income-tax Act, 2025 ss. 423-426 (replacement provisions effective AY 2027-28 onward) |
| Tax Authority | Central Board of Direct Taxes (CBDT), Income Tax Department |
| Filing Portal | https://www.incometax.gov.in |
| Tax Year | Financial Year 2025-26 (Assessment Year 2026-27) |
| Currency | INR only |
| Advance Tax Threshold | Rs. 10,000 net after TDS/TCS |
| Contributor | Open Accountants community |
| Validated By | Pending -- requires sign-off by Indian CA (Chartered Accountant) |
| Validation Date | Verified by Mayur Deokar (615638) on 2026-06-06 |
| Skill Version | 2.0 |
| Confidence Coverage | Tier 1: instalment schedule, interest calculation, threshold, presumptive single instalment, Challan 280 procedure. Tier 2: TDS credit netting, capital gains timing, revised estimates mid-year. Tier 3: international income interactions, DTAA credit timing, reassessment interest disputes. |
Instalment schedule (regular assessees)
| Instalment | Due Date | Cumulative % | Incremental % |
|---|---|---|---|
| 1st | 15 June | 15% | 15% |
| 2nd | 15 September | 45% | 30% |
| 3rd | 15 December | 75% | 30% |
| 4th | 15 March | 100% | 25% |
Interest rates
| Section | Rate | Type |
|---|---|---|
| s. 234B (total default) | 1% per month (simple) | On shortfall between assessed tax and advance tax paid |
| s. 234C (instalment deferment) | 1% per month (simple) | On instalment shortfall |
Presumptive taxation schemes
| Scheme | Applies To | Deemed Profit Rate |
|---|---|---|
| Section 44AD | Eligible businesses, turnover up to Rs. 2 crore (Rs. 3 crore if digital >= 95%) | 8% of turnover (6% for digital receipts) |
| Section 44ADA | Eligible professionals, gross receipts up to Rs. 50 lakh (Rs. 75 lakh if digital >= 95%) | 50% of gross receipts |
Conservative defaults
| Ambiguity | Default |
|---|---|
| Unknown tax regime | New regime (s. 115BAC, default from AY 2024-25) |
| Unknown TDS credits | $0 (full advance tax required) |
| Unknown business vs salary split | Treat all as business income (advance tax applies) |
| Unknown senior citizen status | Not exempt (advance tax required) |
This is the deterministic pre-classifier for bank statement entries related to advance tax. Match by case-insensitive substring on the counterparty name or transaction description.
Advance tax payments via Challan 280 patterns
| Pattern | Treatment | Notes |
|---|---|---|
| CHALLAN 280, ITNS 280 | ADVANCE TAX PAYMENT | Verify Type of Payment code is 100 (Advance Tax) |
| INCOME TAX, INCOMETAX.GOV | ADVANCE TAX PAYMENT | e-Pay Tax portal payment -- confirm challan type |
| TIN-NSDL, PROTEAN (formerly TIN-NSDL) | ADVANCE TAX PAYMENT | Online challan generation |
| SBI TAX, STATE BANK TAX | ADVANCE TAX PAYMENT | Bank-based challan payment |
| HDFC TAX, ICICI TAX, AXIS TAX | ADVANCE TAX PAYMENT | Net banking tax payment |
TDS deductions patterns
| Pattern | Treatment | Notes |
|---|---|---|
| TDS, TAX DEDUCTED AT SOURCE | TDS CREDIT | Reduces advance tax obligation; verify in Form 26AS/AIS |
| TDS U/S 194J, TDS U/S 194C | TDS CREDIT | Professional/contractor TDS -- common for self-employed |
| TDS U/S 194N | TDS ON CASH WITHDRAWAL | May not relate to income; verify |
Self-assessment tax patterns
| Pattern | Treatment | Notes |
|---|---|---|
| SELF ASSESSMENT TAX, SAT PAYMENT | SELF-ASSESSMENT (NOT ADVANCE TAX) | Challan 280 with Type 300 -- paid at time of filing ITR; NOT counted as advance tax for s. 234B/C interest |
Refund receipts patterns
| Pattern | Treatment | Notes |
|---|---|---|
| CPC REFUND, INCOME TAX REFUND, NEFT-CPC | TAX REFUND | Refund of excess advance tax or TDS; verify against ITR |
Who must pay advance tax table
| Category | Advance Tax Required? |
|---|---|
| Self-employed with estimated tax liability >= Rs. 10,000 | YES |
| Salaried with other income and estimated tax >= Rs. 10,000 | YES |
| Senior citizen (60+) with NO business/professional income | NO (exempt under s. 207) |
| Senior citizen (60+) WITH business/professional income | YES |
| Presumptive assessee (s. 44AD / 44ADA) | YES, but single instalment |
| Any person with estimated tax liability < Rs. 10,000 | NO |
s. 234C shortfall trigger table
| Due Date | Shortfall Trigger | Interest Period |
|---|---|---|
| 15 June | Paid less than 12% of assessed tax | 3 months |
| 15 September | Paid less than 36% of assessed tax | 3 months |
| 15 December | Paid less than 75% of assessed tax | 3 months |
| 15 March | Paid less than 100% of assessed tax | 1 month |
Income-tax Act, 1961; CBDT Notification
Key challan details
| Field | Value |
|---|---|
| Challan Number | ITNS 280 |
| Tax Applicable Code | 0021 (Income Tax -- Other than Companies) |
| Type of Payment Code | 100 (Advance Tax) |
| Assessment Year | AY following the FY (e.g., FY 2025-26 = AY 2026-27) |
Senior citizen exemption table
| Condition | Advance Tax Obligation |
|---|---|
| Resident individual 60+ with NO business/professional income | EXEMPT |
| Resident individual 60+ WITH business/professional income | NOT exempt -- must pay |
| Non-resident senior citizen | NOT exempt -- must pay |
Penalties table
| Penalty Type | Rate | Legislation |
|---|---|---|
| Interest on total default (s. 234B) | 1% per month (simple) on shortfall | s. 234B |
| Interest on instalment deferment (s. 234C) | 1% per month (simple) on instalment shortfall | s. 234C |
| Penalty for non-payment of demand | Up to amount of tax in arrears | s. 221 (discretionary) |
Situation: Client earns most income from capital gains realised in January. No advance tax paid in June or September. Resolution: Capital gains exemption under s. 234C applies. No interest on June/September shortfall caused by capital gains income. Client must pay advance tax on capital gains in December or March instalment. s. 234B may still apply if total advance tax is short by year-end.
Situation: Client is a consultant with Rs. 15,00,000 income. TDS at 10% = Rs. 1,50,000. Estimated total tax = Rs. 1,80,000. Net advance tax = Rs. 30,000. Resolution: Advance tax required (Rs. 30,000 > Rs. 10,000). Pay in four instalments. TDS credit reduces the base for interest computation.
Situation: Client uses s. 44AD for business income but also has capital gains. Resolution: Presumptive instalment rule (single payment by 15 March) applies to the business income portion. Capital gains portion may require separate advance tax in the instalment following realisation. Flag for reviewer.
Situation: Client aged 65, has rental income of Rs. 6,00,000 and freelance consulting income of Rs. 2,00,000. Resolution: Senior citizen exemption does NOT apply because the client has business/professional income. Full advance tax schedule applies on all income.
Situation: Client's income estimate increases significantly after September. Resolution: Recalculate and pay the shortfall in December and March instalments. s. 234C interest applies only to the extent of shortfall at each instalment date based on final assessed tax.
Situation: Client paid all advance tax instalments but did not file ITR by the due date. Resolution: s. 234B interest does not apply (advance tax was paid). However, s. 234A interest (late filing) applies separately at 1% per month. Flag for reviewer.
Situation: Non-resident Indian with business income from India through a fixed place of business. Resolution: Advance tax provisions apply to NRIs. The senior citizen exemption does NOT apply to non-residents. Flag for reviewer -- confirm DTAA relief availability.
Situation: Client asks about advance tax provisions under the new Income-tax Act, 2025. Resolution: The Income-tax Act, 2025 (effective 1 April 2026) replaces ss. 234B/234C with new sections 424/425. For FY 2025-26 (AY 2026-27), the 1961 Act still applies. Flag for reviewer.
When a Tier 2 situation is identified:
REVIEWER FLAG
Tier: T2
Client: [name]
Situation: [description]
Issue: [what is ambiguous]
Options: [possible treatments]
Recommended: [most likely correct treatment and why]
Action Required: Chartered Accountant must confirm before advising client.
When a Tier 3 situation is identified:
ESCALATION REQUIRED
Tier: T3
Client: [name]
Situation: [description]
Issue: [outside skill scope]
Action Required: Do not advise. Refer to Chartered Accountant. Document gap.
Input: Age 40, estimated total income Rs. 12,00,000 (business), new tax regime, no TDS, no presumptive scheme. Expected output: Tax approx Rs. 1,17,000 (after rebate/cess). Advance tax: Rs. 17,550 by Jun 15, Rs. 52,650 cumulative by Sep 15, Rs. 87,750 cumulative by Dec 15, Rs. 1,17,000 by Mar 15.
Input: Age 35, estimated total income Rs. 8,00,000 (business), new tax regime, TDS of Rs. 25,000. Expected output: Tax approx Rs. 32,500. Net after TDS = Rs. 7,500. Below Rs. 10,000 threshold. NO advance tax required.
Input: Age 45, business turnover Rs. 1,50,00,000, presumptive income at 8% = Rs. 12,00,000, no TDS. Expected output: Single instalment of 100% advance tax due by 15 March. No June/September/December obligations.
Input: Age 67, resident, income from house property Rs. 5,00,000 + interest Rs. 3,00,000. NO business income. Expected output: Senior citizen exemption applies. NO advance tax required.
Input: Age 65, resident, freelance income Rs. 10,00,000. Tax liability above Rs. 10,000. Expected output: Exemption does NOT apply. Full four-instalment schedule required.
Input: Assessed tax Rs. 5,00,000. Total advance tax paid Rs. 3,00,000. Self-assessment tax paid on July 25 of AY. Expected output: Shortfall = Rs. 2,00,000. 90% threshold = Rs. 4,50,000. Advance tax paid < 90%, so s. 234B applies. Interest = Rs. 2,00,000 x 1% x 4 months (Apr, May, Jun, Jul) = Rs. 8,000.
Input: Assessed tax Rs. 4,00,000. Paid Rs. 0 by Jun 15. Paid Rs. 1,80,000 by Sep 15. Expected output: Jun shortfall trigger: 12% of Rs. 4,00,000 = Rs. 48,000. Paid Rs. 0 < Rs. 48,000. Interest base = (15% x Rs. 4,00,000) - Rs. 0 = Rs. 60,000. Interest = Rs. 60,000 x 1% x 3 = Rs. 1,800.
Input: Consultant income Rs. 20,00,000. TDS at 10% = Rs. 2,00,000. Estimated tax = Rs. 2,10,000. Net = Rs. 10,000. Expected output: Net advance tax exactly Rs. 10,000. At threshold -- s. 208 says "exceeds Rs. 10,000", so at exactly Rs. 10,000, NO advance tax required.
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Review status
Accountant-reviewed
Reviewed by a named licensed practitioner against the stated sources, as general reference material.
Accountant-reviewed
Reviewed by Mayur Deokar · 6 June 2026
A named accountant reviewed this complete Guide version within the stated scope. It is not a guarantee.
View review record →Other India computations in the OpenAccountants Tax Library.
Watch for: The senior-citizen exemption never applies where there is any business or professional income, and never applies to non-residents.
Income-tax Act 1961, s. 207 (proviso); ss. 44AD, 44ADA
Schedule the four installments (regular assessees)
Map the estimated liability across the four statutory due dates (15 June, 15 September, 15 December, 15 March) using the cumulative-percentage schedule, and credit TDS as paid on its deduction date.
Income-tax Act 1961, s. 211; s. 209
Apply the presumptive single-installment rule
For 44AD/44ADA assessees, treat the whole liability as one installment due by 15 March, with no June, September or December obligation on the presumptive income.
Income-tax Act 1961, s. 211(1)(b); ss. 44AD, 44ADA
Compute s. 234C interest (deferment of installments)
For each due date, if the amount paid falls below that installment's trigger percentage, charge simple interest on the shortfall to the cumulative target for the statutory period; a presumptive assessee is tested only at the March date.
Watch for: A shortfall caused by capital gains, lottery, or first-time business income is ignored for s. 234C provided it is made good in a later installment or by 31 March.
Income-tax Act 1961, s. 234C
Compute s. 234B interest (default in payment)
If total advance tax paid is less than 90% of assessed tax, charge simple interest on the shortfall from 1 April of the assessment year to the date of self-assessment or regular assessment; any part of a month counts as a full month.
Watch for: Compute the shortfall on tax net of TDS/TCS, never on gross tax; s. 234B and s. 234C can apply simultaneously and the interest is mandatory and non-waivable.
Income-tax Act 1961, s. 234B
Pay via Challan 280
Pay through the e-Pay Tax portal using challan ITNS 280, selecting the Income Tax (Other than Companies) tax-applicable code and the Advance Tax payment-type code for the correct assessment year, then save the challan receipt (BSR code, serial number and date) for the ITR.
Challan ITNS 280
Deliver the working paper and offer a review
Present the installment schedule and any s. 234B/234C interest as an estimated working paper, clearly labelled as a draft and not a filed return. Name Mayur Deokar as the OpenAccountants Partner who reviewed this guidance, and offer a review before the client files or pays.
What Mayur checks before signing off
Ready to work through your own numbers? Add this Guide to your AI and it takes it from here, then routes the finished paper for a Partner to review.
Add to your AI15 June — 1st instalment
15% cumulativeITA s 211
15 September — 2nd instalment
45% cumulativeITA s 211
15 December — 3rd instalment
75% cumulativeITA s 211
15 March — 4th instalment
100% cumulativeITA s 211
Threshold
Tax liability ≥ Rs. 10,000 (after TDS)ITA s 208
Presumptive Taxpayers (44AD/44ADA) — Instalment
Single payment by 15 March (100%)ITA s 211(1)(b)
s 234B (total default)
1% per month (simple) on shortfallITA s 234B
s 234C (instalment deferment)
1% per month (simple) on instalment shortfallITA s 234C
Senior Citizen Exemption — Exempt if
Resident 60+, NO business/professional incomeITA s 207
Senior Citizen Exemption — NOT exempt if
Senior WITH business/professional incomeITA s 207
Challan 280 — Tax applicable code
0021 (IT — Other than Companies)ITNS 280
Challan 280 — Type of payment code
100 (Advance Tax)ITNS 280
Country
India
Jurisdiction Code
IN
Primary Legislation
Income-tax Act, 1961, Sections 207-211 (advance tax liability and computation); Sections 234B, 234C (interest on default/deferment)
Supporting Legislation
Income-tax Act, 1961, s. 44AD, s. 44ADA (presumptive taxation); s. 190-194 (TDS provisions); Income-tax Act, 2025 ss. 423-426 (replacement provisions effective AY 2027-28 onward)
Tax Authority
Central Board of Direct Taxes (CBDT), Income Tax Department
Filing Portal
https://www.incometax.gov.in
Tax Year
Financial Year 2025-26 (Assessment Year 2026-27)
Currency
INR only
Advance Tax Threshold
Rs. 10,000 net after TDS/TCS
Contributor
Open Accountants community
Validated By
Pending -- requires sign-off by Indian CA (Chartered Accountant)
Validation Date
Verified by Mayur Deokar (615638) on 2026-06-06
Skill Version
2.0
Confidence Coverage
Tier 1: instalment schedule, interest calculation, threshold, presumptive single instalment, Challan 280 procedure. Tier 2: TDS credit netting, capital gains timing, revised estimates mid-year. Tier 3: international income interactions, DTAA credit timing, reassessment interest disputes.
Quick reference field table
| Field | Value | |---|---| | Country | India | | Jurisdiction Code | IN | | Primary Legislation | Income-tax Act, 1961, Sections 207-211 (advance tax liability and computation); Sections 234B, 234C (interest on default/deferment) | | Supporting Legislation | Income-tax Act, 1961, s. 44AD, s. 44ADA (presumptive taxation); s. 190-194 (TDS provisions); Income-tax Act, 2025 ss. 423-426 (replacement provisions effective AY 2027-28 onward) | | Tax Authority | Central Board of Direct Taxes (CBDT), Income Tax Department | | Filing Portal | https://www.incometax.gov.in | | Tax Year | Financial Year 2025-26 (Assessment Year 2026-27) | | Currency | INR only | | Advance Tax Threshold | Rs. 10,000 net after TDS/TCS | | Contributor | Open Accountants community | | Validated By | Pending -- requires sign-off by Indian CA (Chartered Accountant) | | Validation Date | Verified by Mayur Deokar (615638) on 2026-06-06 | | Skill Version | 2.0 | | Confidence Coverage | Tier 1: instalment schedule, interest calculation, threshold, presumptive single instalment, Challan 280 procedure. Tier 2: TDS credit netting, capital gains timing, revised estimates mid-year. Tier 3: international income interactions, DTAA credit timing, reassessment interest disputes. |
Instalment schedule (regular assessees)
| Instalment | Due Date | Cumulative % | Incremental % | |---|---|---|---| | 1st | 15 June | 15% | 15% | | 2nd | 15 September | 45% | 30% | | 3rd | 15 December | 75% | 30% | | 4th | 15 March | 100% | 25% |
Presumptive taxation (s. 44AD / 44ADA)
Single instalment, 100% due by 15 March.
Interest rates
| Section | Rate | Type | |---|---|---| | s. 234B (total default) | 1% per month (simple) | On shortfall between assessed tax and advance tax paid | | s. 234C (instalment deferment) | 1% per month (simple) | On instalment shortfall |
Presumptive taxation schemes
| Scheme | Applies To | Deemed Profit Rate | |---|---|---| | Section 44AD | Eligible businesses, turnover up to Rs. 2 crore (Rs. 3 crore if digital >= 95%) | 8% of turnover (6% for digital receipts) | | Section 44ADA | Eligible professionals, gross receipts up to Rs. 50 lakh (Rs. 75 lakh if digital >= 95%) | 50% of gross receipts |
Conservative defaults
| Ambiguity | Default | |---|---| | Unknown tax regime | New regime (s. 115BAC, default from AY 2024-25) | | Unknown TDS credits | $0 (full advance tax required) | | Unknown business vs salary split | Treat all as business income (advance tax applies) | | Unknown senior citizen status | Not exempt (advance tax required) |
Required inputs list
Before computing any advance tax figure, you MUST know: 1. Age as of April 1 of the assessment year -- senior citizen exemption may apply. 2. Nature of income -- business/profession, capital gains, salary, rental, other sources. 3. Has the client opted for presumptive taxation (s. 44AD / 44ADA)? -- changes the instalment schedule. 4. Estimated total income for the financial year -- needed to compute estimated tax liability. 5. Tax regime chosen: old or new (s. 115BAC)? -- affects tax rates and available deductions. 6. TDS already deducted or expected during the year -- reduces advance tax obligation. 7. TCS credits available -- also reduces advance tax obligation. 8. Any brought-forward losses or unabsorbed depreciation? -- affects taxable income estimate. If estimated total tax liability after TDS/TCS is less than Rs. 10,000, STOP. No advance tax is due.
R-IN-AT-1 -- International income with DTAA credit timing
Trigger: client has income from multiple countries and asks about advance tax credit for foreign taxes under a Double Tax Avoidance Agreement. Message: "DTAA credit timing in advance tax computation is complex and outside this skill's scope. Please escalate to a Chartered Accountant with international tax expertise."
R-IN-AT-2 -- Reassessment interest disputes
Trigger: client is disputing interest levied under s. 234B or s. 234C following a reassessment. Message: "Interest disputes under reassessment proceedings require representation before the assessing officer. This is outside this skill's scope. Please escalate to a Chartered Accountant."
R-IN-AT-3 -- Income-tax Act, 2025 transitional queries spanning both regimes
Trigger: client asks about advance tax provisions that span both the 1961 Act and the 2025 Act. Message: "The Income-tax Act, 2025 (effective 1 April 2026) replaces ss. 234B/234C with new sections 424/425. For FY 2025-26, the 1961 Act applies. Queries spanning both regimes should be escalated to a Chartered Accountant."
Advance tax payments via Challan 280 patterns
| Pattern | Treatment | Notes | |---|---|---| | CHALLAN 280, ITNS 280 | ADVANCE TAX PAYMENT | Verify Type of Payment code is 100 (Advance Tax) | | INCOME TAX, INCOMETAX.GOV | ADVANCE TAX PAYMENT | e-Pay Tax portal payment -- confirm challan type | | TIN-NSDL, PROTEAN (formerly TIN-NSDL) | ADVANCE TAX PAYMENT | Online challan generation | | SBI TAX, STATE BANK TAX | ADVANCE TAX PAYMENT | Bank-based challan payment | | HDFC TAX, ICICI TAX, AXIS TAX | ADVANCE TAX PAYMENT | Net banking tax payment |
TDS deductions patterns
| Pattern | Treatment | Notes | |---|---|---| | TDS, TAX DEDUCTED AT SOURCE | TDS CREDIT | Reduces advance tax obligation; verify in Form 26AS/AIS | | TDS U/S 194J, TDS U/S 194C | TDS CREDIT | Professional/contractor TDS -- common for self-employed | | TDS U/S 194N | TDS ON CASH WITHDRAWAL | May not relate to income; verify |
Self-assessment tax patterns
| Pattern | Treatment | Notes | |---|---|---| | SELF ASSESSMENT TAX, SAT PAYMENT | SELF-ASSESSMENT (NOT ADVANCE TAX) | Challan 280 with Type 300 -- paid at time of filing ITR; NOT counted as advance tax for s. 234B/C interest |
Refund receipts patterns
| Pattern | Treatment | Notes | |---|---|---| | CPC REFUND, INCOME TAX REFUND, NEFT-CPC | TAX REFUND | Refund of excess advance tax or TDS; verify against ITR |
Legislation
Income-tax Act, 1961, s. 207, s. 208Income-tax Act, 1961, s. 207, s. 208
Who must pay advance tax table
| Category | Advance Tax Required? | |---|---| | Self-employed with estimated tax liability >= Rs. 10,000 | YES | | Salaried with other income and estimated tax >= Rs. 10,000 | YES | | Senior citizen (60+) with NO business/professional income | NO (exempt under s. 207) | | Senior citizen (60+) WITH business/professional income | YES | | Presumptive assessee (s. 44AD / 44ADA) | YES, but single instalment | | Any person with estimated tax liability < Rs. 10,000 | NO |
Threshold calculation
estimated_tax_liability = tax_on_estimated_total_income + surcharge + cess net_advance_tax_due = estimated_tax_liability - TDS_credits - TCS_credits if net_advance_tax_due < 10,000: advance_tax_required = NO else: advance_tax_required = YESIncome-tax Act, 1961, s. 207, s. 208
Net threshold note
The Rs. 10,000 threshold is on the NET tax after TDS/TCS credits, not gross tax.
Legislation
Income-tax Act, 1961, s. 234BIncome-tax Act, 1961, s. 234B
Applicability
Section 234B applies when total advance tax paid is less than 90% of assessed tax.Income-tax Act, 1961, s. 234B
Interest 234B formula
if advance_tax_paid < (assessed_tax x 90%): shortfall = assessed_tax - advance_tax_paid interest_234B = shortfall x 1% x number_of_monthsIncome-tax Act, 1961, s. 234B
Rate and period
Rate: 1% per month or part of month (simple interest). Period: from 1 April of assessment year to date of self-assessment tax payment or regular assessment. Any part of a month counts as a full month.Income-tax Act, 1961, s. 234B
Legislation
Income-tax Act, 1961, s. 234CIncome-tax Act, 1961, s. 234C
Trigger condition
Interest is triggered when advance tax paid by the due date is less than the shortfall trigger percentage:
s. 234C shortfall trigger table
| Due Date | Shortfall Trigger | Interest Period | |---|---|---| | 15 June | Paid less than 12% of assessed tax | 3 months | | 15 September | Paid less than 36% of assessed tax | 3 months | | 15 December | Paid less than 75% of assessed tax | 3 months | | 15 March | Paid less than 100% of assessed tax | 1 month |
Tolerance explanation
The shortfall triggers (12%, 36%) include an 80% tolerance on the cumulative targets (15% x 80% = 12%, 45% x 80% = 36%), except December (75% actual) and March (100% actual).
s. 234C instalment formulas
# June instalment if paid_by_jun15 < (assessed_tax x 12%): shortfall = (assessed_tax x 15%) - paid_by_jun15 interest = shortfall x 1% x 3 # September instalment if paid_by_sep15 < (assessed_tax x 36%): shortfall = (assessed_tax x 45%) - paid_by_sep15 interest = shortfall x 1% x 3 # December instalment if paid_by_dec15 < (assessed_tax x 75%): shortfall = (assessed_tax x 75%) - paid_by_dec15 interest = shortfall x 1% x 3 # March instalment if paid_by_mar15 < (assessed_tax x 100%): shortfall = (assessed_tax x 100%) - paid_by_mar15 interest = shortfall x 1% x 1Income-tax Act, 1961, s. 234C
Presumptive assessee interest note
For presumptive assessees: only one instalment by 15 March, only 1 month interest if short. No June/September/December shortfall applies.
Capital gains / lottery exemption
Capital gains / lottery exemption: if a shortfall is caused by capital gains, lottery, or first-time business income, the shortfall is ignored for s. 234C provided the assessee pays in remaining instalments or by 31 March.
Legislation
Income-tax Act, 1961, s. 190, s. 199, s. 209Income-tax Act, 1961, s. 190, s. 199, s. 209
TDS treatment
TDS already deducted reduces estimated tax liability before computing advance tax instalments. TDS is treated as advance tax paid on the date it was deducted (for s. 234C) or as reduction from assessed tax (for s. 234B). Self-assessment tax (s. 140A) is NOT counted as advance tax for interest calculation.
Legislation
Income-tax Act, 1961, s. 115BACIncome-tax Act, 1961, s. 115BAC
Regime impact
The regime choice (old vs new) affects the estimated tax liability and therefore the advance tax quantum. It does NOT change the instalment schedule or interest provisions.
Steps
1. Log in to https://www.incometax.gov.in or use authorised bank net banking 2. Select "e-Pay Tax" under "e-File" menu 3. Select Challan No. ITNS 280 4. Select Tax Applicable: (0021) Income Tax (Other than Companies) 5. Select Type of Payment: (100) Advance Tax 6. Enter PAN, assessment year (AY), address, and amount 7. Select bank and complete payment via net banking / debit card / UPI 8. Download and save the Challan Receipt (BSR code + challan serial number + date)
Key challan details
| Field | Value | |---|---| | Challan Number | ITNS 280 | | Tax Applicable Code | 0021 (Income Tax -- Other than Companies) | | Type of Payment Code | 100 (Advance Tax) | | Assessment Year | AY following the FY (e.g., FY 2025-26 = AY 2026-27) |
Retention note
Always retain the challan receipt. The BSR code and challan serial number are required when filing ITR.
Legislation
Income-tax Act, 1961, s. 207, provisoIncome-tax Act, 1961, s. 207, proviso
Senior citizen exemption table
| Condition | Advance Tax Obligation | |---|---| | Resident individual 60+ with NO business/professional income | EXEMPT | | Resident individual 60+ WITH business/professional income | NOT exempt -- must pay | | Non-resident senior citizen | NOT exempt -- must pay |
Exempt interest note
If exempt, no interest under s. 234B or s. 234C applies.
Penalties table
| Penalty Type | Rate | Legislation | |---|---|---| | Interest on total default (s. 234B) | 1% per month (simple) on shortfall | s. 234B | | Interest on instalment deferment (s. 234C) | 1% per month (simple) on instalment shortfall | s. 234C | | Penalty for non-payment of demand | Up to amount of tax in arrears | s. 221 (discretionary) |
Simultaneous application
Interest under s. 234B and s. 234C can both apply simultaneously. Interest is mandatory and non-discretionary -- the Assessing Officer has no power to waive or reduce it.
Prohibitions list
- NEVER compute advance tax without confirming estimated total income and applicable tax regime - NEVER ignore the Rs. 10,000 threshold -- always check net tax after TDS/TCS before prescribing advance tax - NEVER apply the senior citizen exemption to a client with business/professional income - NEVER apply the senior citizen exemption to non-resident individuals - NEVER tell a presumptive assessee they must pay four instalments -- single instalment by 15 March applies - NEVER compute s. 234B interest using gross tax -- always reduce by TDS/TCS credits first - NEVER waive or suggest waiver of s. 234B/234C interest -- it is mandatory and non-discretionary - NEVER conflate self-assessment tax (s. 140A) with advance tax -- they are separate for interest computation - NEVER forget that s. 234B and s. 234C can BOTH apply simultaneously to the same assessee - NEVER present advance tax figures as definitive -- always label as estimated and advise the client to consult their CA for final computation
Rendered from the canonical facts model · facts last reviewed Jun 6, 2026. General reference only — confirm with a qualified professional before acting.
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