Are You Liable to Pay Advance Tax? Here’s What You Need to Know 

Did you face any financial penalty? You may if you pay your taxes too late.  

The Income Tax Department expects individuals to pay advance tax, with a liability exceeding Rs 10,000.  

They are allowed to pay a portion of their income throughout the year rather than settling into a lump sum amount in the end. 

Whether you are an employee with a fixed salary or a freelancer or a business owner, you may need to acknowledge advance taxes to avoid inevitable penalties.  

It will also help you to manage your finances with ease. 

This article delves into the details of advance taxes & how a professional tax consultant can help you to defeat unusual concerns during ITR filing.  

What is Advance Tax?  

Advance tax is just what it says—paying your income tax in advance, rather than delaying it till the end of the financial year.  

It’s on your estimated annual income, and instead of paying one large lump amount, you can pay it in installments on certain dates mentioned by the Income Tax Department. 

Avoiding these payments doesn’t just put your taxes behind calendar schedule, it can cost a lot in interest penalties and unnecessary aggravation.  

Prepaying with advance tax keeps you on schedule while controlling all your finances throughout the year. 

Who Should Pay Advance Taxes?  

Whether you are a salaried individual, a freelancer, or a person operating a business or profession—if your aggregate tax liability during the financial year is more than Rs10,000, you are liable to pay advance tax.  

This applies to everyone in general, including salaried individuals with fixed incomes and those with project-based or variable incomes. 

 
 
Senior Citizens: A Special Exemption 

 
If you are a senior citizen (60 years or older) and do not earn anymore from business or profession, you are exempt from paying advance tax.  

However, if you are 60 plus and still receiving income from business or professional activities, you must adhere to the principles of advance tax like everyone else.  
 
Presumptive Income Taxpayers: Special Payment Rules 

 
1. For Businesses under Section 44AD 

 
Taxpayers who opt for the presumptive taxation system under Section 44AD, must pay the entire advance tax amount in one instalment—on or before 15th March of the financial year.  

You can also finish the payment by 31st March, if required. 
 
2. For Professionals under Section 44ADA 

 
Independent professionals like physicians, attorneys, architects, and consultants who come under Section 44ADA, follow the same principle.  

They, likewise, must pay their entire advance tax by 15th March or have the option of settling it by 31st March. 
 
3. For Section 44AE Businesses 

 
Individuals operating a business of goods carriage and choosing the presumptive scheme under Section 44AE, should deposit advance tax in four instalments within the due dates of the Income Tax Department. 

How Advance Tax is Calculated? 

Advance tax calculation is transparent, but it requires a concise projection of your income annually. This is how you can make the calculation: 

•  Estimate income: Put all the salary, rent, business, interest, etc., together. 

• Compute total tax liability: Use the corresponding slab rates for the year. 

• Deduct TDS (Tax Deducted at Source): Your employer or bank could have already deducted some tax. 

You can pay for the remaining portion in four installments: 

  Due Date                                                                       Payment of Advance Tax 

On or before 15^th June,2025                                           15% Tax liability 

On or before 15^th September 2025                               45% Tax liability  

On or before 15^th December 2025                                75% Tax liability 

On or before 15^th March 2026                                        100% Tax liability 

Benefits of Advance Tax 

Paying advance tax isn’t merely penalty saving—it has additional advantages: 

• Improved money management: Your better idea of your annual income and tax bill. 

• Less year-end pressure: No massive lump-sum tax bill at the end of the financial year. 

• No penalties: You won’t have to pay interest and other penalty fees if you make your payments on time. 
   
  People who find it inconvenient to perform tax calculations tend to opt for tax filing services or a tax advisor to facilitate and conduct financial processes efficiently. 

Role of a Tax Consultant 

Indian tax laws are intricate with constant changes to rules and diverse provisions.  

An experienced tax consultant or a tax advisor in Hyderabad can help you with proper calculations, timely payments, and maximizing tax planning.  

They will also provide you with strategic recommendations based on your financial history so that you pay precisely what you should do, nothing more, nothing less. 
 
With increasing enthusiasm for side jobs, online freelancing, and investment in capital markets, even with a fixed income are picking up tax filing services or online ITR filing to simplify their tax payments. 

Conclusion 

Advance tax is more than a statutory requirement—it’s a wise financial practice.  

It promotes disciplined management of cash flows and spares you from last-minute rush during ITR filing or otherwise. 
 
If you are still unsure about your liability, don’t think twice to contact a tax consultant in Hyderabad.  

From proper estimation to online payments and paperwork, professional advice can make everything go smoothly. And with various services providing online ITR filing in Hyderabad, your taxation has never been easier. 
 
Don’t wait till the last minute. Plan, pay, and remain penalty-free while aiming for your future financial well-being.