Advance Tax Guide: Is ₹12 Lakh Income Truly Tax-Free?
Stay compliant with the latest 2026 Tax Rules
The recent changes in the Union Budget have sparked a major question: "If my income up to ₹12 lakh is tax-free under the New Regime, why should I care about Advance Tax?"
While it’s true that the New Tax Regime offers a full rebate for income up to ₹12 lakh, specific scenarios could still pull you into the Advance Tax net. Missing these can lead to interest penalties under Sections 234B and 234C.
1. The ₹12 Lakh Magic Number
Under the New Tax Regime for FY 2025-26 and FY 2026-27:
- Income up to ₹12 Lakh: You receive a rebate of ₹60,000 under Section 87A, making your liability zero.
- Salaried Employees: With the ₹75,000 Standard Deduction, the effective tax-free limit is ₹12.75 lakh.
But wait! Advance Tax applies if your estimated tax liability (after TDS) exceeds ₹10,000. You might still owe tax if:
- You have Capital Gains from stocks or property.
- You have significant interest from Fixed Deposits not covered by TDS.
- You opted for the Old Tax Regime where the limit is much lower.
2. Advance Tax Deadlines
| Due Date | Installment Payable |
|---|---|
| By June 15 | 15% of total tax |
| By September 15 | 45% of total tax |
| By December 15 | 75% of total tax |
| By March 15 | 100% of total tax |
*Senior citizens (60+) without business income are exempt from Advance Tax.
3. How to Pay Online (Step-by-Step)
- Visit the Income Tax e-Filing Portal.
- Click on 'e-Pay Tax' in the Quick Links.
- Enter your PAN and verify with OTP.
- Select 'Income Tax' and choose Assessment Year 2026-27.
- Choose 'Advance Tax (100)' as the payment type.
- Calculate, enter the amount, and pay via UPI, Net Banking, or Card.
4. Current Tax Slabs (New Regime)
| Income Slab | Tax Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
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