What is Advance tax?

Advance tax is the payment of income tax in advance. The taxpayer estimates his total tax liability in advance and pays in the financial year in which income is received. It is also called as “pay-as-you-earn” scheme. Any amount paid before the end of the financial year is considered an advance tax.

Advance tax is paid in instalments as per due dates provided by the income tax department.

Who should pay Advance Tax?

Salaried, freelancers, professionals and businesses

The taxpayers having Advance tax liability is Rs. 10,000/- or more in a financial year have to pay advance tax.

Presumptive income for Businesses

The taxpayers who have opted for a presumptive taxation scheme under section 44AD have to pay the full advance tax liability in one instalment on or before 15 March. 

Presumptive income for Professionals

The professionals such as engineers, doctors, chartered accountants, architects etc. who have opted for a presumptive taxation scheme under section 44ADA have to pay full advance tax liability in one instalment on or before 15 March. 

Who is exempted from paying Advance Tax?

Resident Senior citizens, who are 60 years or older and do not have business/professional income are exempted from paying advance tax.

Due Dates for Payment of Advance Tax

for F.Y 2020-21 and 2021-22 for all taxpayers (excluding those who have opted for the Presumptive Taxation Scheme)

for taxpayers who have opted for Presumptive Taxation Scheme under section 44AD & 44ADA – Business and Professionals

You can also estimate your Advance tax Liability using our Advance Tax Estimator.