Freelancers & Creators
Advance tax for freelancers: dates, amounts and interest
When freelancers must pay advance tax, how to split it across four dates, and what missing one costs.
By Siddharth Joshi3 min read
Salaried people barely think about advance tax because their employer deducts TDS every month. Freelancers and creators have no such cushion. Clients may deduct some TDS, foreign clients deduct none, and the rest is your responsibility — paid in instalments during the year, not in one lump when you file. Get the timing wrong and interest quietly piles up. Here is how it works for FY 2025-26 (AY 2026-27).
Do you need to pay it?
Advance tax applies if your estimated tax for the year, after subtracting TDS, is ₹10,000 or more. That covers most full-time freelancers and many salaried people with meaningful side income. Resident senior citizens (60 and above) with no business or professional income are exempt, but that rarely helps a working freelancer.
The four instalments
If you compute profit the regular way (receipts minus actual expenses), pay by these cumulative targets:
| Due date | Cumulative share of the year’s tax |
|---|---|
| 15 June | 15% |
| 15 September | 45% |
| 15 December | 75% |
| 15 March | 100% |
If you use presumptive taxation under 44AD or 44ADA, the rule is simpler: the whole amount is due by 15 March, in one go if you like.
Worked example
Tanvi, a UX consultant under the new regime, expects ₹18,00,000 of profit for FY 2025-26 after expenses. She keeps regular books.
- Tax up to ₹16 lakh: ₹1,20,000
- ₹2 lakh at 20%: ₹40,000
- Tax ₹1,60,000 + 4% cess ₹6,400 = ₹1,66,400
Indian clients paying her ₹6,00,000 deduct 10% TDS under 194J, so ₹60,000 is already covered. Her advance tax liability is ₹1,66,400 − ₹60,000 = ₹1,06,400.
- By 15 June: 15% = ₹15,960
- By 15 September: 45% = ₹47,880 (pay ₹31,920 more)
- By 15 December: 75% = ₹79,800 (pay ₹31,920 more)
- By 15 March: 100% = ₹1,06,400 (pay ₹26,600 more)
Income rarely arrives evenly, so re-estimate before each date. If a big project lands in January, the March instalment absorbs it.
What it costs to miss a date
Two interest charges apply, each at 1% per month or part of a month.
Section 234C (deferment). If you fall short of a cumulative target, interest runs on the shortfall — generally for three months for the June, September and December instalments, and one month for March. If Tanvi skipped June entirely, the ₹15,960 shortfall would cost her roughly ₹15,960 × 1% × 3 = ₹479.
Section 234B (shortfall). If, by 31 March, the advance tax you paid is less than 90% of the tax finally assessed, interest runs on the unpaid amount from 1 April until you pay it. Someone who pays nothing in advance and settles everything when filing in August can face 234B for several months on top of 234C for every missed instalment.
Neither is ruinous on small amounts, but on a ₹1 lakh liability the two together can easily run into a few thousand rupees — money you get nothing for.
How to pay
Use the e-Pay Tax service on the income-tax e-filing portal and choose Challan 280, selecting advance tax as the payment type and the correct assessment year (AY 2026-27 for FY 2025-26 income). Pay by net banking, UPI, card or other options offered. Save the challan receipt; the payment should appear in Form 26AS within a few days, and you will claim it in your ITR.
A simple routine
- In early June, estimate the year’s profit conservatively from your pipeline.
- Compute tax, subtract expected TDS, and pay 15%.
- Before 15 September and 15 December, update the estimate with actual receipts and top up.
- In early March, do a near-final calculation and pay the balance.
- Keep a running sheet of income, TDS and challans — it doubles as a filing checklist.
Setting aside a fixed share of each client payment in a separate account makes the instalments painless. If you overpay, the excess comes back as a refund when you file.
General information, not tax advice. Rules change, so check the latest rules or speak to a CA before you act.