Advance Tax: Who Must Pay and How to Compute It

Advance tax applies when estimated tax liability for the year is Rs 10,000 or more. Pay 15 percent by June 15, 45 percent by September 15, 75 percent by December 15, and 100 percent by March 15. Failure to pay attracts interest under Section 234B (one percent per month on shortfall) and 234C (interest on each instalment shortfall for three months). Most salaried taxpayers are exempt because their TDS covers the full liability.