Advance tax is income tax that you pay in instalments spread across the financial year itself, rather than paying your entire tax bill in one go after the year ends. It's required if your total estimated tax liability for the year, after accounting for TDS already deducted, exceeds ₹10,000 — which typically applies to freelancers, business owners, and anyone with significant income beyond a regular salary.
The government sets four instalment deadlines through the year — mid-June, mid-September, mid-December, and mid-March — by which cumulative percentages of your estimated tax (15%, 45%, 75%, and 100% respectively) should be paid. Missing these deadlines or underpaying can attract interest penalties, so those with variable or non-salary income often estimate their likely annual tax early and set aside money to pay these instalments on time.