Blog · India
Advance Tax Payment Guide for Indian Freelancers
If your tax liability exceeds ₹10,000, you must pay advance tax in 4 installments. Here's how to calculate and pay on time.
Many Indian freelancers don't realize they need to pay tax during the year, not just at filing time. If your estimated tax liability for the year exceeds ₹10,000, you're required to pay advance tax in quarterly installments.
Advance Tax Deadlines
| Installment | Deadline | Minimum % of Total Tax |
|---|---|---|
| 1st installment | June 15 | 15% |
| 2nd installment | September 15 | 45% |
| 3rd installment | December 15 | 75% |
| 4th installment | March 15 | 100% |
The percentages are cumulative. By the September deadline, you should have paid at least 45% of your total estimated tax (not 45% of the remaining amount).
Penalty for Missing Deadlines
- Section 234B: If you pay less than 90% of total tax by March 31, interest at 1% per month on the unpaid amount
- Section 234C: If any installment is short, interest at 1% per month for 3 months on the shortfall
These penalties can add up quickly. For example, if you owe ₹50,000 in tax but pay nothing until filing in July, you'd face approximately ₹8,000-10,000 in interest.
How to Calculate Advance Tax
- Estimate your annual income: Based on current earnings trajectory
- Apply Section 44ADA: 50% of gross receipts as deemed income
- Subtract deductions: 80C, health insurance, standard deduction (if applicable)
- Calculate tax: Using New or Old Regime rates
- Pay installments: Via tin.tin.nsdl.com (Challan ITNS 280)
How to Pay Advance Tax Online
- Visit tin.tin.nsdl.com/etax-nsc or use your bank's net banking
- Select Challan No./ITNS 280
- Enter your PAN and contact details
- Select (002) Self Assessment Tax as the type of payment
- Select the relevant Assessment Year
- Enter the amount and pay via net banking
- Save the challan — you'll need it for your ITR filing
What If Your Income Changes?
Advance tax is an estimate. If your actual income differs from your estimate:
- Income increased: Pay the additional tax in the next installment or as a self-assessment tax before filing
- Income decreased: You can reduce your remaining installments. If you overpaid, claim a refund when filing ITR
Want to calculate your taxes? Try our India tax calculator or compare tax rates.