The advance tax instalment schedule, explained
Why the 15/45/75/100 split is cumulative, not quarterly.
Advance tax is often described as “four quarterly instalments,” which makes it easy to assume each one is simply a quarter of the year’s liability. The actual schedule — 15%, 45%, 75%, 100% — is cumulative instead, and that distinction is exactly where an easy-to-miss shortfall creeps in.
Cumulative targets, not four equal slices
Each due date checks how much you’ve paid in totalfor the year so far against a cumulative percentage of your full-year net liability — 15% by 15 June, 45% by 15 September, 75% by 15 December, and the full 100% by 15 March. It isn’t four independent 25% payments; it’s one running total, checked four times, with the required share of that total growing at each checkpoint.
A worked example: a shortfall that lingers
Take a net advance tax liability of ₹90,000 (₹1,50,000 estimated for the year, minus ₹60,000 already deducted as TDS), paid at ₹10,000, ₹25,000, ₹30,000, and ₹25,000 across the four instalment windows.
| Instalment | Required cumulative | Actually paid (cumulative) | Shortfall | Interest |
|---|---|---|---|---|
| 1st (15 June, 15%) | ₹13,500 | ₹10,000 | ₹3,500 | ₹105 |
| 2nd (15 Sept, 45%) | ₹40,500 | ₹35,000 | ₹5,500 | ₹165 |
| 3rd (15 Dec, 75%) | ₹67,500 | ₹65,000 | ₹2,500 | ₹75 |
| 4th (15 March, 100%) | ₹90,000 | ₹90,000 | ₹0 | ₹0 |
The Q1 shortfall is ₹3,500. In Q2, ₹25,000 more gets paid — a perfectly reasonable-looking amount — but the cumulative requirement jumps by ₹27,000 (from ₹13,500 to ₹40,500), so the shortfall actually widensto ₹5,500 rather than shrinking. Only by Q3, once the required jump slows relatively, does the gap start narrowing — and it finally clears exactly by Q4. Total interest across all four checkpoints: ₹345, entirely from cumulative shortfalls that never showed up as a single large missed payment, just a persistent small gap.
Plan your quarterly advance tax instalments and avoid interest penalties.
Why the schedule front-loads the way it does
The jump between checkpoints isn’t even — 15%, then a 30-point jump to 45%, another 30-point jump to 75%, then a smaller 25-point jump to 100%. That means a shortfall from the very first instalment needs to be caught up on top of an already-large second-instalment requirement, which is precisely why a modest early gap can persist for two or three checkpoints even while later payments look reasonably sized. Catching up isn’t about paying “this quarter’s normal share” again — it’s about paying enough extra, on top of that share, to close the earlier gap as well.
The one piece of good news: once a due date passes, that instalment’s interest is fixed — paying the shortfall back immediately afterward doesn’t reduce it, but it also doesn’t grow further until the next checkpoint. The only way to avoid the interest entirely is hitting each cumulative target on time, not making up for it faster once a date has already passed.
All figures are indicative and for educational purposes only — not financial advice.
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