📊 Advance Tax – Key Points Under the Income Tax Act, 2025

The new framework under the Income Tax Act, 2025 continues the concept of paying tax during the year based on estimated income, known as Advance Tax.

Understanding the basic provisions helps taxpayers avoid interest and manage cash flow efficiently.

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📌 Who should pay Advance Tax?

Advance tax is payable when the estimated tax liability exceeds ₹10,000 during the financial year.

However, resident senior citizens (60+) without income from business or profession are exempt.

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📅 Advance Tax Instalment Schedule

Taxpayers must pay advance tax in four instalments:

✔ 15 June – 15% of total tax
✔ 15 September – 45% of total tax
✔ 15 December – 75% of total tax
✔ 15 March – 100% of total tax

Taxpayers under presumptive taxation may pay the entire amount by 15 March.

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⚠ Interest implications

Interest may apply in two situations:

• Default in payment – If advance tax paid is less than 90% of assessed tax.
• Deferment of instalments – If instalments are not paid as per schedule.

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💡 Important Relief

Shortfall in instalments due to capital gains, dividend income, or similar unexpected income will not attract interest if the tax is paid in subsequent instalments or before 31 March.

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✔ Advance tax is based on self-assessment and estimated income.
✔ Timely payment helps avoid interest and maintain compliance.

CA Ramakrishna Sanjay
7760252581