Archive · 7 Nov 2025
Advance Tax Liability for Income Below ₹12 Lakhs Under New Tax Regime
Imagine you need to pay your taxes throughout the year, not just at the very end.
If the total tax you owe is more than ₹10,000, you usually have to pay it a little bit at a time, which is called 'advance tax'.
For example, if you have income from bank interest and selling stocks, you need to figure out if you owe more than ₹10,000.
Even though your bank interest might not be taxed, your stock profits could be.
If your total tax bill is over ₹10,000, you'll likely need to pay advance tax.
There are some special rules about small tax breaks that might be tricky to use, so it's often best to just pay the tax to avoid problems.
If you are older and don't have business income, you might not need to pay advance tax.
Advance tax is required if total tax payable exceeds ₹10,000, irrespective of the tax regime.
Under the new tax regime, bank interest income up to ₹4 lakh is not taxed.
Short-term capital gains on listed shares are taxed at 20%, with a potential utilization of the unutilized tax slab.
A rebate under Section 87A for income up to ₹12 lakh may be practically limited to the 5% tax rate for short-term capital gains.
Senior citizens without business or professional income are exempt from paying advance tax.
- Who
- Individuals with expected bank interest and short-term capital gains under the new tax regime.
- What
- Determination of advance tax liability based on income sources and tax rules.
- When
- Financial Year 26 (FY26)
- Where
- India (implied by tax laws)
- Why
- To comply with tax regulations requiring advance payment of tax when total tax liability exceeds ₹10,000.
- Advance Tax Trigger Threshold
- ₹10,000 (net tax payable after TDS)
- New Tax Regime Default
- Yes
- Tax on Bank Interest Income
- Nil (below ₹4 lakh limit)
- Tax on Short-Term Capital Gains (STCG)
- 20% on ₹2 lakh (after utilizing ₹1 lakh unutilized slab)
- Rebate Under Section 87A
- Potentially limited to 5% rate, practical claim uncertain
- Senior Citizen Exemption
- Not required to pay advance tax if no business/profession income