Summary: The content explains the provisions relating to advance tax under the Income-tax Act, 1961 and the corresponding provisions in the Income-tax Act, 2025, stating that only the section numbers have changed while the substantive provisions remain the same. Sections 207 to 211 of the 1961 Act correspond to Clauses 401 to 408 of the Income-tax Act, 2025. Advance tax is payable on the current year’s estimated income, including capital gains and winnings from lotteries, crossword puzzles, races, card games, gambling and betting, where the estimated tax liability is ₹10,000 or more. Resident senior citizens having no income under the head “Profits and gains of business or profession” continue to be exempt from payment of advance tax. Advance tax is computed by estimating current income and applying the applicable tax rates, and may be paid electronically or through an authorised bank using Challan ITNS 280. Companies and persons covered by Section 44AB are required to pay online. The due dates and instalments remain unchanged at 15 June (15%), 15 September (45%), 15 December (75%) and 15 March (100%, after adjusting earlier payments). Assessees under Sections 44AD(1) or 44ADA(1) are required to pay 100% by 15 March, and tax on specified income arising after that date is payable by 31 March.
What is Advance Tax?
The scheme of advance tax requires all assesse to estimate their current year’s income and tax liability on that income, exceeds the specified limit, the assesse is required to pay the estimated tax in instalments during the financial year itself. Thus, an assesse is required to pay tax as he earns. We can say that earn and pay tax accordingly.
Income subject to advance tax: (Section 207)
The advance tax shall be payable on all the items of income included in the total income chargeable to tax for the financial year in which the advance tax is payable. In the case of capital gains, winnings from lotteries, crossword puzzles, races including horse races, card games, and other games, gambling or betting are also to be considered for advance tax payment.
It may be noted that the provisions of section 207(1), shall not apply to an individual resident in India, who does not have any income under the head, ‘ Profit and gains of business or profession’ and is a senior citizen is not required to advance tax during the financial year 2012-13 and on words.
Liability for payment of advance tax: (Section 403) (IT ACT-2025)
- We know that under the I.T.Act-2025, advance tax shall be payable during the financial year in respect of the current income of the assesse, as per the provisions of this part.
- For the purpose of this part, “current income” a tax year means the total income of the assesse which would be chargeable to tax for such tax year.
- The provisions of above (1) shall not apply to an individual resident in India, who-
- does not have any income chargeable under the head “Profits and gains of business or profession”; and
- is a senior citizen at any time during the tax year.
Conditions of liability to pay advance tax (Section 404) (IT ACT-2025).
Under the IT Act 1961 the same condition was there in Section 208, while in IT Act, 2025, the advance tax shall be payable by the assesse, whose income is liable to pay tax during the year, as computed under this Part, is Rs. 10,000 or more. This condition is remain the same as under the IT Act, 1961.
Every person, whose estimated tax liability for the Financial Year is Rs. 10,000 or more, is liable to pay advance tax.
Computation of advance tax: (Section 209)
An assesse calculate that his total income during the financial is much higher than the tax calculation of Rs.10,000, and is liable to pay advance tax for the financial year 2025-26. Now the question arise in his mind that when and how much tax is to be paid?
Where the calculation is made by the assesse for the purpose of advance tax, he shall first calculate his current income and calculate the income tax thereon at the rate in force in the financial year.
How to pay advance tax?
The advance tax can be paid online (electronically) or through an authorized bank, by submitting the details in Challan No. ITNS 280. Of course it is mandatory for a Company or a person (other than a Company) who is required to get his accounts audited under section 44AB to pay the taxes through on line mode only.
Due dates for payment of advance tax: (Section 211)
Advance tax calculated under section 209 on the current income shall be payable in four instalments during each financial year. Under section 211(1)(a) of the Act, due date of payment and the amount payable in each installment during financial year is indicated in the following table:
Due date of instalment Amount payable
| S. No. | Due Date of Instalment | Amount Payable |
| 1 | On or before 15th June | Not less than 15% of such advance tax. |
| 2 | On or before 15th September | Not less than 45% of such advance tax, as reduced by the amount, if any, paid in the earlier instalment. |
| 3 | On or before 15th December | Not less than 75% of such advance tax, as reduced by the amounts, if any, paid in the earlier instalments. |
| 4 | On or before 15th March | The whole amount of such advance tax, as reduced by the amount or amounts, if any, paid in the earlier instalments. |
In the case of an assesse who declares profits and gains in accordance with the provisions of Section 44AD(1) or Section 44ADA(1), as the case may be is required to pay 100% of the advance tax as calculated u/s 209 on the current year income, on or before 15th March.
Where the current years income includes, capital gains or winnings from lotteries, crossword puzzles, races etc. if the income accrues or arises after 15th March, after payment of last instalment of advance tax payable thereon, should be paid on or before 31st March.
In short, we can see that there is no change in payment dates, calculation and other things, only the sections are changed.
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