Who has to pay advance tax?
Anyone whose net tax liability for the year — after TDS — is ₹10,000 or more. In practice that means freelancers, consultants, business owners, and salaried people with meaningful side income: freelance projects, high FD interest, rent, or capital gains. If you're purely salaried, your employer's TDS almost always covers it and you owe nothing quarterly. Resident senior citizens (60+) with no business income are fully exempt.
What are the due dates and percentages?
Four cumulative instalments: 15% of the year's tax by 15 June, 45% by 15 September, 75% by 15 December, and 100% by 15 March. Under presumptive taxation (44AD/44ADA), the whole amount is due in one instalment by 15 March. Pay online via the e-filing portal using Challan 280 (select "Advance Tax").
What happens if I miss an instalment (Section 234C)?
You pay simple interest at 1% per month on the shortfall — charged for 3 months on each of the first three instalments and 1 month on the last. There's a built-in tolerance: no interest on the June instalment if you've paid at least 12% of the year's tax, and none on September if you've paid at least 36%. The interest isn't a penalty you apply for — it's added automatically when you file your ITR.
What is Section 234B and how is it different?
234C punishes late instalments during the year; 234B punishes underpaying overall. If your total advance tax by 31 March is less than 90% of your final tax, you owe 1% per month on the shortfall from 1 April until you pay. Rule of thumb: get to at least 90% by 15 March and 234B never touches you.
My income is unpredictable — how do I estimate it?
Estimate conservatively and revise each quarter — that's how advance tax is designed to work. You don't need to be exact: recalculate before each due date with your actual year-to-date income and pay the updated cumulative amount. Capital gains have special treatment: you only pay advance tax on a gain from the instalment after it arises, so a windfall in January only affects the 15 March instalment.
I'm salaried — should I ever worry about this?
Only if you have income your employer doesn't know about: freelance work, big FD/bond interest, rent, or stock/mutual fund gains. TDS on salary covers salary tax only. If your extra income creates ₹10,000+ of uncovered tax, advance tax applies to you. Alternatively, you can declare the extra income to your employer and ask them to deduct higher TDS — that also avoids instalments.