TaxFinancial Glossary
Advance Tax
Definition
Income tax paid in instalments during the financial year rather than as a lump sum at year-end. If your total tax liability exceeds Rs 10,000 in a year, you must pay advance tax in four quarterly instalments: 15% by 15 June, 45% by 15 September, 75% by 15 December, and 100% by 15 March.
Why It Matters
Salaried employees usually do not worry about advance tax because TDS covers it. But freelancers, business owners, and anyone with significant capital gains or rental income must pay advance tax. Missing deadlines attracts interest under Sections 234B and 234C at 1% per month on the shortfall.