Advance tax for founders and NRIs: the four dates and how to size them

The 15 Jun / 15 Sep / 15 Dec / 15 Mar instalments, why one-off income breaks them, and how to avoid 234B/234C interest.

Advance tax is "pay as you earn," in four instalments. For salaried employees with TDS it rarely bites — but for founders and NRIs with capital gains, ESOP income or consulting spikes, missing it means interest under Sections 234B and 234C.

The four instalments

For most taxpayers, cumulative advance tax is due as:

• 15% by 15 June
• 45% by 15 September
• 75% by 15 December
• 100% by 15 March

These are cumulative targets of your total estimated liability for the year, net of TDS.

Why one-off income breaks the schedule

The schedule assumes income spread evenly. A capital gain, an ESOP exercise, a dividend or a consulting bonus in, say, December throws the earlier instalments off. (For genuinely unforeseeable capital gains, the rules let you pay the tax in the remaining instalments — a relief worth knowing.)

Interest under 234B and 234C

• 234C charges interest for shortfall in each instalment (deferment).
• 234B charges interest where less than 90% of the liability is paid by year-end.

Both run at 1% per month — small per month, meaningful over time and across a large gain.

A quick sizing method

1. Estimate full-year income, including known one-offs.
2. Compute tax; subtract TDS already deducted and earlier instalments.
3. Pay the cumulative target by each date — and re-estimate after any large event.

How Advisory Monks Consulting helps

Our Founders Tax and Pravasi desks run a quarterly checkpoint, re-size each instalment after big events, and keep you out of 234B/234C territory.

General information; confirm rates for your year.