1. Introduction (Sections 405 & 408)

         Advance tax is a mechanism under the Income Tax Act, 2025 requiring taxpayers to pay income tax in instalments during the financial year itself, instead           of a lump sum at the end of the year. The provisions relating to advance tax are primarily governed under Sections 405 and 408, depending upon the                   nature of taxation applicable to the assessee.

2. Advance Tax Payment – General Cases (Non-Presumptive Taxation) (Section 405)

      2.1 Applicability (Section 405)

             An assessee is required to pay advance tax where:

• The estimated tax liability during the financial year is ₹10,000 or more, and
• The assessee is not covered under the presumptive taxation scheme
  

     2.2 Payment Schedule (Section 405)

            Advance tax is required to be paid in instalments during the financial year in the following proportions:

• 15% of total tax liability
• 45% of total tax liability
• 75% of total tax liability
• 100% of total tax liability
  
  

     2.3 Flexibility in Payment (Section 405)

           An assessee may:

• Revise advance tax liability in subsequent instalments
• Adjust payments based on revised income estimates
  
  

3. Advance Tax under Presumptive Taxation (Section 408)

     3.1 Applicability (Section 408)

        Where an assessee opts for presumptive taxation:

• Advance tax is payable in a single instalment
  
  

    3.2 Due Date (Section 408)

• The entire advance tax must be paid on or before 15th March
  
  

    3.3 Treatment of Late Payment (Section 408)

• Any tax paid up to 31st March is deemed to be advance tax
  
  

4. Interest and Penal Consequences (Section 425)
   
   

     4.1 For Non-Presumptive Taxpayers (Section 425(1))

            Interest is payable where:

• Advance tax is not paid; or
• Advance tax paid is less than the prescribed percentage

      Interest liability:

• 3% of shortfall for the first three instalments
• 1% of shortfall for the last instalment
  
  

       4.2 Relaxation Provision (Section 425(1))

              No interest shall be payable if:

• At least 12% of total tax is paid by 15th June
• At least 36% of total tax is paid by 15th September
  
  

      4.3 For Presumptive Taxpayers (Section 425)

             Where:

• Advance tax is not paid; or
• Less than 90% of assessed tax is paid

              Then:

• Interest at 1% per month is payable
• Applicable from 1st April of the following financial year