Who Should File Advance Income Tax?

Advance tax should be filed by individuals, including salaried employees, freelancers, self-employed professionals, business owners, and those with income from sources other than salary.

There are certain criteria that determine whether a taxpayer is required to pay advance tax, such as the estimated tax liability. If the total tax liability for the financial year (after considering tax deducted at source) is Rs. 10,000 or more, advance tax must be paid.

If you have substantial income on which tax is deducted at source (TDS), such as salary, interest income, or rental income, and the TDS is insufficient to cover your total tax liability, you may need to pay advance tax. Similarly, if you have income from a business or profession, whether as a self-employed individual or as a partner in a partnership firm, and your estimated tax liability for the financial year exceeds Rs. 10,000, advance tax is required.

Individuals who have capital gains from the sale of assets, such as stocks, real estate, or mutual funds, and their estimated tax liability on these gains exceeds Rs. 10,000, should also pay advance tax. Additionally, if you have income from other sources, such as rental income, interest income, dividends, or freelance earnings, and your total tax liability exceeds Rs. 10,000, advance tax is mandatory.

If you are a salaried employee and your employer deducts TDS from your salary as per the income tax slabs, you may not need to pay advance tax separately. However, if you have income from other sources or if you expect your total tax liability to exceed the TDS amount, you should consider paying advance tax.

It’s crucial to seek advice from a tax professional or refer to the income tax guidelines specific to your country to determine your advance tax liability and ensure timely compliance.


Hi, I am Nikesh Mehta, owner and writer of this site. I’m an analytics professional and also love writing on finance and related industry. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business. I can be reached at [email protected].

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