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India follows a "pay-as-you-earn" system. Rather than settling your whole tax bill when you file, you are expected to pay it in instalments through the year as advance tax. Salaried people mostly do this automatically via TDS — but any income TDS does not cover can leave a gap that silently accrues interest.
Who must pay advance tax
You must pay advance tax if your total tax liability, after reducing TDS/TCS, is ₹10,000 or more in the financial year. There is one key exemption: a resident senior citizen (aged 60 or above) with no business or professional income is not required to pay advance tax and can settle everything as self-assessment tax at filing.
The four instalment due dates
Advance tax is paid in four instalments, each a cumulative percentage of your estimated annual tax:
| Due date | Cumulative advance tax payable |
|---|---|
| 15 June | 15% |
| 15 September | 45% |
| 15 December | 75% |
| 15 March | 100% |
Note these are cumulative: by 15 September you should have paid a total of 45%, not an extra 45%.
Section 234C: interest for missing an instalment
Section 234C charges interest when you pay less than the required cumulative percentage by any instalment date. It is 1% per month for three months on the shortfall for the first three instalments, and 1% for one month on the last. In practice, deferring an instalment costs you 1% a month on the amount you were short. There is a small relief: if income is unforeseen (like a sudden capital gain or dividend), you can pay the tax on it in the very next instalment without 234C on that piece.
Section 234B: interest for underpaying for the year
Section 234B applies if you have not paid at least 90% of your total tax (through TDS + advance tax) by the end of the financial year. It charges 1% per month on the unpaid amount from 1 April of the assessment year until you pay, typically at filing. So 234C penalises the timing within the year, and 234B penalises an overall shortfall carried past year-end.
A quick worked example
Suppose your total tax for the year is ₹1,00,000 and TDS covers ₹40,000, leaving ₹60,000 payable. Because this exceeds ₹10,000, you owe advance tax on ₹60,000. If you pay nothing during the year and clear it only at filing, you face 234C on each missed instalment plus 234B on the ₹60,000 (since you paid well under 90%). Paying the instalments on schedule avoids both.
Why salaried taxpayers still get caught
Your employer deducts TDS on salary, but it usually does not cover:
- Savings and FD interest beyond the small TDS the bank deducts;
- Dividends above the TDS threshold;
- Capital gains on shares, mutual funds or property;
- Freelance or rental income.
You can ask your employer to deduct extra TDS on such income (by declaring it), or pay advance tax yourself. Either way, check your position before 15 March.
How to pay and estimate
Pay advance tax online through the e-filing portal's e-Pay Tax service under the correct assessment year and "advance tax" head; keep the challan. To estimate how much to pay, project your full-year income and tax with the ITR calculator, subtract expected TDS, and split the balance across the remaining instalments. Reconcile against your AIS/TIS so no income is missed.
Estimate your advance tax
Project your yearly tax, subtract TDS, and plan your instalments.
Open the ITR Calculator → See all due datesFrequently asked questions
Who has to pay advance tax?
Any taxpayer whose total tax liability after TDS is ₹10,000 or more in a year. Resident senior citizens (60+) with no business income are exempt from advance tax.
What are the advance-tax due dates?
15% by 15 June, 45% (cumulative) by 15 September, 75% by 15 December and 100% by 15 March. Each is a cumulative target of your estimated annual tax.
What is the difference between 234B and 234C?
234C is interest for deferring or missing an individual instalment during the year. 234B is interest for not paying at least 90% of your total tax by year-end. Both are 1% per month.
I am salaried with only TDS — do I need to worry?
Usually not, because your employer deducts TDS. But extra income like interest, dividends or capital gains that TDS does not fully cover can create an advance-tax liability, so check before 15 March.