How to Pay Advance Tax on the Income Tax Portal

Advance tax is the “pay as you earn” mechanism under the Income-tax law, requiring you to discharge your tax liability in instalments during the year rather than in a single payment after the year ends. It applies to salaried individuals with other income, freelancers, professionals, business owners and companies alike, wherever the tax due is significant. This guide explains who must pay, the instalment schedule, how to compute each instalment, and the step-by-step e-Pay Tax process on the income tax e-filing portal.

What is advance tax and who must pay it

Advance tax is payable when your estimated total tax liability for the financial year, after reducing eligible Tax Deducted at Source (TDS) and Tax Collected at Source (TCS), is Rs 10,000 or more. In such cases the balance liability must be paid in instalments across the year on the notified due dates.

The obligation applies to every category of taxpayer, including individuals, Hindu Undivided Families, firms and companies. Salaried employees whose employers deduct TDS on salary usually need not worry about advance tax on that salary, but they must still consider it where they earn additional income such as interest, rent, capital gains, dividends or freelance receipts on which enough tax is not otherwise deducted.

Who is exempt

A resident senior citizen (aged 60 years or more) who does not have any income from business or profession is not required to pay advance tax. Such a taxpayer may instead pay the entire liability as self-assessment tax before filing the return. Note that a senior citizen who does carry on a business or profession remains liable to pay advance tax in the normal manner.

Instalment due dates for regular taxpayers

For most taxpayers, advance tax is paid in four instalments during the financial year. Each instalment is expressed as a cumulative percentage of the total estimated tax liability for the year.

1. By 15 June: at least 15% of the total advance tax.
2. By 15 September: at least 45% of the total advance tax, less the amount already paid.
3. By 15 December: at least 75% of the total advance tax, less the amount already paid.
4. By 15 March: 100% of the total advance tax, less the amount already paid.

If a due date falls on a bank holiday or weekend, payment on the next working day is generally treated as timely. Any shortfall that remains after 15 March, or tax paid after year-end, is settled as self-assessment tax at the time of filing the return.

Presumptive taxation taxpayers

Taxpayers who declare income on a presumptive basis under Section 44AD (eligible businesses) or Section 44ADA (eligible professionals) enjoy a simplified schedule. They are not required to pay in four instalments; instead, the entire advance tax is payable in a single instalment on or before 15 March of the financial year. Paying the full amount by that date keeps them compliant.

How to compute your advance tax

Computing advance tax is essentially a forecast of your full-year tax position, carried out afresh before each instalment as your income becomes clearer. A structured approach helps avoid both underpayment and needless overpayment.

1. Estimate your total income for the year from all heads, including salary, house property, business or profession, capital gains and other sources such as interest and dividends.
2. Apply the deductions and exemptions you expect to claim, and choose the applicable tax regime (old or new) to arrive at taxable income.
3. Calculate the tax on that income at the slab rates in force, add the applicable surcharge where relevant, and add the health and education cess.
4. Reduce the TDS and TCS already deducted or expected to be deducted on your income, along with any available tax credits.
5. If the balance is Rs 10,000 or more, that is your advance tax for the year. Apply the cumulative percentage for each due date to work out the amount payable in each instalment.

Because capital gains and certain windfall incomes are difficult to predict, the law allows the related advance tax to be paid in the remaining instalments falling due after the income arises, which protects taxpayers from interest in genuinely unforeseeable cases.

Interest for shortfall or default

Failing to pay advance tax, or paying less than required, attracts interest. Two provisions are relevant. Interest under Section 234B applies where you have not paid advance tax at all, or have paid less than 90% of the assessed tax; it is charged at 1% per month or part of a month from 1 April of the assessment year until the tax is paid. Interest under Section 234C applies where individual instalments fall short of the prescribed cumulative percentages, again at 1% per month for the deferral period. Paying each instalment in full and on time is therefore the simplest way to avoid this cost.

Paying advance tax through e-Pay Tax

Advance tax is paid online through the e-Pay Tax service on the income tax e-filing portal, which has replaced the older Challan 280 route on the NSDL site. You can pay either after logging in with your PAN, or through the pre-login option on the portal.

1. Visit the income tax e-filing portal and log in with your PAN or user ID and password. Alternatively, use the e-Pay Tax option available before login.
2. Go to e-File, then Pay Tax, and select the e-Pay Tax service.
3. Choose New Payment and select the tile for Income Tax.
4. Select the correct Assessment Year and choose the type of payment as Advance Tax (minor head 100), then continue.
5. Enter the tax break-up under the appropriate columns such as tax, surcharge, cess and any interest, and confirm the total amount.
6. Select your preferred payment mode: net banking, debit card, payment gateway (which supports UPI and cards), RTGS or NEFT, or pay at the bank counter.
7. Preview and verify the details, complete the payment, and download the Challan Receipt bearing the Challan Identification Number.

Retain the challan receipt carefully, since the details are needed while filing your return so that the payment is correctly reflected against your PAN. Paid challans can be viewed and downloaded again from the Payment History tab under e-Pay Tax.

Frequently asked questions

Do salaried employees need to pay advance tax?

If your only income is salary and your employer deducts adequate TDS, no separate advance tax is usually required. However, if you have other income such as interest, rent, capital gains or freelance receipts on which the tax due is Rs 10,000 or more after TDS, you must pay advance tax on that portion.

What happens if I miss an instalment?

You can still pay the shortfall in a later instalment or as self-assessment tax, but interest under Sections 234B and 234C at 1% per month will apply on the deferred amount. Paying on time avoids this additional cost.

Can I pay the whole advance tax in one go?

Presumptive taxpayers under Sections 44AD and 44ADA may pay the full amount by 15 March. Other taxpayers are expected to follow the four-instalment schedule; paying only at the end will generally attract Section 234C interest for the earlier instalments.

Which challan applies to advance tax?

Advance tax is paid using the Income Tax challan with minor head 100 for advance tax, generated through the e-Pay Tax service. This is the current equivalent of the earlier Challan 280.

Is excess advance tax refunded?

Yes. If your advance tax and TDS together exceed your final liability, the excess is refunded after you file your return and it is processed, generally with interest where applicable.

Estimating income across multiple heads, choosing the right regime and timing each instalment correctly can be demanding, especially where capital gains or business income fluctuate. TAXAJ can handle your complete income tax computation, advance tax planning and income tax filing so that every instalment is paid accurately and on time, keeping interest and last-minute stress away.