Advance Tax Planning & Payment

Under Section 208 of the Income-tax Act 1961, advance tax is mandatory if your estimated tax liability for the year exceeds Rs 10,000. For most taxpayers, instalments fall on 15 June (15%), 15 September (45%), 15 December (75%), and 15 March (100%) of the financial year per Sec 211, IT Act 1961 (≡ §407/§408, IT Act 2025). Senior citizens without business or professional income are exempt from advance tax under Section 207.

Section 234C charges 1% per month (simple interest) for three months on the shortfall below 12%, 36%, and 75% thresholds at June, September, and December; the March instalment shortfall attracts 1% for one month. Section 234B charges 1% per month on the entire unpaid balance if advance tax paid is less than 90% of assessed tax by 31 March. For Tax Year 2026-27 onwards under the Income-tax Act 2025, the equivalent provisions are Sections 447 and 446 respectively.

We project income under all five heads -- salary (Form 16 or employer certificate), business/professional profits (provisional P&L), capital gains realised to date under Sections 45, 112, and 112A, house property income, and other sources -- then deduct Chapter VI-A deductions (Sections 80C to 80U) and rebate under Section 87A to arrive at estimated tax. Capital gains arising after an instalment due date are adjusted in the next instalment under the special proviso to Section 234C(1).

No. Under the second proviso to Sec 211(1), IT Act 1961 (≡ §407/§408, IT Act 2025), taxpayers opting for presumptive taxation under Section 44AD (turnover up to Rs 3 crore) or Section 44ADA (professionals up to Rs 75 lakh) must pay the entire advance tax in a single instalment by 15 March. Missing that payment triggers Section 234B interest at 1% per month on the unpaid amount.

Yes. Excess advance tax over the final assessed liability is refundable under Section 237 of ITA 1961. The refund carries simple interest at 0.5% per month under Section 244A, computed from 1 April of the assessment year (or the date of payment if later) to the date the refund is granted. There is no provision to carry excess advance tax forward -- it is always refunded in the assessment year.