Advance Tax
Advance tax refers to the payment of income tax in installments during the financial year instead of paying it in a lump sum at the end of the year. It is applicable to individuals, professionals, and businesses whose total tax liability exceeds ₹10,000 in a financial year.
At Mauli Pawar & Associates, we provide complete assistance for Advance Tax calculation, planning, and timely payment. Our experts ensure accurate tax estimation so you avoid interest penalties and maintain smooth compliance with tax laws.
Key Highlights
- Applicable if tax liability exceeds ₹10,000
- Quarterly installment payment system
- Avoid interest under Sections 234B & 234C
- Suitable for salaried, professionals, and businesses
- Ensures smooth tax compliance
Who Needs Advance Tax
Salaried Individuals: Those with additional income like rent, interest, or capital gains.
Freelancers & Professionals: Individuals earning through consultancy or services.
Business Owners: Companies and firms with taxable profits.
Investors: Individuals earning from shares, mutual funds, or property.
High Income Earners: Taxpayers with liability above ₹10,000 annually.
Documents Required
PAN Card
Previous Year ITR
Income Details: Salary, business, or other income
Investment Proofs
TDS Details / Form 26AS
Due Dates of Advance Tax
15th June: 15% of total tax liability
15th September: 45% of total tax liability
15th December: 75% of total tax liability
15th March: 100% of total tax liability
Benefits of Advance Tax
Avoid Penalties: Prevent interest under tax provisions
Better Cash Flow: Spread tax payments across the year
Compliance: Stay aligned with tax regulations
Financial Planning: Helps in better budgeting
Frequently Asked Questions
1. How much capital gain is tax free?
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For specified securities covered under Section 112A, long-term capital gains (LTCG) of up to ₹1.25 lakh in a financial year are exempt from tax. LTCG exceeding this threshold is generally taxable at 12.5%, subject to applicable conditions.
Other assets such as property, gold and certain investments may have different tax rules and exemptions.
View Income Tax Department – Capital Gains
Other assets such as property, gold and certain investments may have different tax rules and exemptions.
View Income Tax Department – Capital Gains
2. Is capital gains tax 12.5% or 20%?
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The applicable rate depends on the type of asset, holding period and applicable tax provisions. For many long-term capital assets, LTCG is generally taxed at 12.5% for transfers on or after 23 July 2024. Certain short-term capital gains and specific assets can be taxed differently.
View Income Tax Department – Capital Gains
View Income Tax Department – Capital Gains
3. Who will pay the capital gains tax?
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Generally, the person or entity transferring the capital asset is liable to pay tax on the taxable capital gain arising from the transfer. The applicable tax depends on the asset, holding period, amount of gain and available exemptions.
View Income Tax Department – Capital Gains
View Income Tax Department – Capital Gains
4. What is capital gains tax?
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Capital gains tax is the income tax applicable on the profit arising from the transfer of a capital asset, such as property, shares, mutual funds, gold or other investments.
Capital gains are generally classified as Short-Term Capital Gains (STCG) or Long-Term Capital Gains (LTCG) depending on the nature of the asset and the applicable holding-period rules.
Learn more about Capital Gains
Capital gains are generally classified as Short-Term Capital Gains (STCG) or Long-Term Capital Gains (LTCG) depending on the nature of the asset and the applicable holding-period rules.
Learn more about Capital Gains
5. How do I calculate capital gains?
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Capital gains are generally calculated by deducting the eligible cost of acquisition, eligible cost of improvement and qualifying transfer expenses from the sale consideration.
Basic Formula:
Capital Gain = Sale Consideration − Cost of Acquisition − Cost of Improvement − Eligible Transfer Expenses
The applicable calculation can vary depending on the asset and the relevant tax provisions.
View Income Tax Department – Capital Gains
Basic Formula:
Capital Gain = Sale Consideration − Cost of Acquisition − Cost of Improvement − Eligible Transfer Expenses
The applicable calculation can vary depending on the asset and the relevant tax provisions.
View Income Tax Department – Capital Gains
6. How do I calculate my capital gains tax?
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First calculate the capital gain from the transfer of the asset. Then determine whether it is STCG or LTCG, identify the applicable tax rate, and consider eligible exemptions, deductions and losses.
The final tax liability may also include applicable surcharge and health and education cess.
View Income Tax Department – Capital Gains
The final tax liability may also include applicable surcharge and health and education cess.
View Income Tax Department – Capital Gains
7. How do I avoid capital gains taxes?
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Instead of “avoiding” tax, taxpayers can examine legally available exemptions and tax-saving provisions. Depending on the asset and circumstances, provisions such as Sections 54, 54F and 54EC may provide relief when their conditions are satisfied.
Proper calculation, documentation and timely compliance are important when claiming an exemption.
View Income Tax Department – Capital Gains
Proper calculation, documentation and timely compliance are important when claiming an exemption.
View Income Tax Department – Capital Gains
8. What is the 6 year rule for capital gains tax?
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The commonly searched “6 year rule” is not a general Indian capital gains tax rule. Capital gains taxation in India depends on the type of asset, date of acquisition and transfer, holding period and applicable provisions of the Income-tax Act.
View Income Tax Department – Capital Gains
View Income Tax Department – Capital Gains
9. Is capital gains tax 20% or 24%?
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Capital gains tax is not generally a flat 20% or 24% rate for all assets. The applicable rate depends on the asset and the nature of the gain. For many long-term capital assets, the applicable LTCG rate for transfers on or after 23 July 2024 is 12.5%, subject to the relevant provisions.
Surcharge and health and education cess may also affect the final tax payable.
View Income Tax Department – Capital Gains
Surcharge and health and education cess may also affect the final tax payable.
View Income Tax Department – Capital Gains
10. What are the capital gains tax rates for 2026?
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For Indian taxpayers, the applicable capital gains rate depends on the asset and whether the gain is short-term or long-term. For specified LTCG covered under Section 112A, gains above the applicable ₹1.25 lakh threshold are generally taxed at 12.5%.
Other capital assets may be subject to different provisions and rates.
View Income Tax Department – Capital Gains
Other capital assets may be subject to different provisions and rates.
View Income Tax Department – Capital Gains
11. Is capital gains tax 30%?
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Capital gains tax is not generally charged at a flat 30%. The applicable rate depends on the type of capital asset, holding period and relevant provisions. Additional surcharge and health and education cess may apply in appropriate cases.
View Income Tax Department – Capital Gains
View Income Tax Department – Capital Gains
12. How much capital gains can be tax free?
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There is no single tax-free capital-gain limit for every type of asset. For specified securities covered under Section 112A, LTCG up to ₹1.25 lakh per financial year is exempt from tax, subject to the applicable conditions.
Other assets may qualify for separate exemptions depending on the circumstances.
View Income Tax Department – Capital Gains
Other assets may qualify for separate exemptions depending on the circumstances.
View Income Tax Department – Capital Gains
13. What is the 50% capital gains tax discount for individuals?
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A general 50% capital gains tax discount for individuals is not a standard provision under Indian capital gains taxation. Tax relief in India is generally provided through specific exemptions, deductions and special provisions applicable to particular assets and transactions.
View Income Tax Department – Capital Gains
View Income Tax Department – Capital Gains
14. What is the exemption for capital gains?
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India provides various capital gains exemptions depending on the asset and transaction. Common provisions include Section 54, Section 54F and Section 54EC, subject to their respective conditions and investment requirements.
View Income Tax Department – Capital Gains
View Income Tax Department – Capital Gains
15. What happens if I don't pay capital gains tax?
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Failure to correctly report and pay applicable tax can result in interest, penalties and other consequences under the Income-tax Act. Taxpayers should report taxable capital gains correctly and meet applicable filing and payment requirements.
Visit the Income Tax Department e-Filing Portal
Visit the Income Tax Department e-Filing Portal
16. How to pay capital gains tax?
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Applicable income tax can be paid online through the Income Tax e-Filing Portal. Depending on the circumstances, tax may be paid as advance tax, self-assessment tax or through other applicable payment mechanisms.
Visit Income Tax e-Filing Portal
Visit Income Tax e-Filing Portal
17. What is the time limit for paying capital gains tax?
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The payment deadline depends on the type of tax being paid. If advance tax is applicable, instalment deadlines apply during the financial year. Any remaining tax liability may generally be paid as self-assessment tax before filing the income tax return.
Visit Income Tax e-Filing Portal
Visit Income Tax e-Filing Portal
18. Where can I pay capital gains tax?
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Income tax relating to capital gains can be paid online through the Income Tax e-Filing Portal using the applicable tax-payment option.
Income Tax e-Filing Portal
Income Tax e-Filing Portal
19. What documents are required for capital gains tax?
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Documents depend on the type of asset. Common records include purchase documents, sale deed or contract notes, broker statements, purchase and sale invoices, improvement expense records, transfer expense receipts and investment statements.
For property transactions, purchase and sale documents and records of eligible improvement and transfer expenses can be particularly important.
For property transactions, purchase and sale documents and records of eligible improvement and transfer expenses can be particularly important.
20. When am I supposed to pay capital gains tax?
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Capital gains are generally reported in the income tax return for the financial year in which the taxable transfer takes place. If advance tax provisions apply, the required tax should be paid according to the applicable advance-tax schedule.
Any balance tax liability is generally payable as self-assessment tax before filing the return.
Visit Income Tax e-Filing Portal
Any balance tax liability is generally payable as self-assessment tax before filing the return.
Visit Income Tax e-Filing Portal
21. Where to put money to avoid capital gains tax?
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Certain capital gains exemptions allow taxpayers to invest or reinvest the gain in specified assets, subject to statutory conditions. Depending on the transaction, provisions such as Section 54, 54F and 54EC may be relevant.
The appropriate exemption depends on the asset sold, taxpayer category, amount of gain and investment made.
View Income Tax Department – Capital Gains
The appropriate exemption depends on the asset sold, taxpayer category, amount of gain and investment made.
View Income Tax Department – Capital Gains
22. What is a simple way to reduce capital gains tax?
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Tax liability can sometimes be reduced through legitimate exemptions, eligible capital-loss set-off, applicable deductions and permitted reinvestment provisions. The available relief depends on the asset and the taxpayer's circumstances.
Proper documentation and compliance are important when claiming any exemption.
Proper documentation and compliance are important when claiming any exemption.
23. Which investment is 100% tax-free?
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There is no general rule that makes all returns or gains from a particular investment completely tax-free. Tax treatment depends on the investment, income type, holding period and applicable exemptions.
Some investments may receive specific tax benefits under the Income-tax Act, but the conditions should be checked before investing.
Some investments may receive specific tax benefits under the Income-tax Act, but the conditions should be checked before investing.
24. How can I avoid capital gains tax on sale of property?
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Property sellers may be able to claim tax relief under provisions such as Section 54, Section 54F or Section 54EC, depending on the nature of the property, type of gain and qualifying reinvestment.
Each exemption has specific conditions and time limits.
View Income Tax Department – Capital Gains
Each exemption has specific conditions and time limits.
View Income Tax Department – Capital Gains
25. Who is eligible for capital gains exemption?
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Eligibility depends on the particular exemption provision. For example, certain exemptions are available to individuals and Hindu Undivided Families (HUFs), subject to the conditions prescribed under the relevant section.
The asset sold and the manner and timing of reinvestment are important factors.
View Income Tax Department – Capital Gains
The asset sold and the manner and timing of reinvestment are important factors.
View Income Tax Department – Capital Gains
26. Can I get tax relief on capital gains?
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Yes. Depending on the type of asset and transaction, taxpayers may qualify for specific capital gains exemptions or relief provisions. These may include provisions such as Sections 54, 54F and 54EC, subject to the applicable conditions.
View Income Tax Department – Capital Gains
View Income Tax Department – Capital Gains
27. How can I be exempted from paying capital gains tax?
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Exemption may be available when the conditions of a specific provision of the Income-tax Act are satisfied. Depending on the transaction, this may involve reinvesting the eligible capital gain in a qualifying asset within the prescribed period.
Important: Exemption is not automatic and the statutory conditions must be satisfied.
View Income Tax Department – Capital Gains
Important: Exemption is not automatic and the statutory conditions must be satisfied.
View Income Tax Department – Capital Gains
28. Who qualifies for 0% capital gains?
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India does not have a general 0% capital-gains tax bracket comparable to certain foreign tax systems. However, specific exemptions and thresholds can result in no tax being payable in particular circumstances.
For example, specified LTCG covered by Section 112A up to ₹1.25 lakh per financial year is exempt, subject to the applicable conditions.
For example, specified LTCG covered by Section 112A up to ₹1.25 lakh per financial year is exempt, subject to the applicable conditions.
29. Am I eligible for capital gains tax exemption?
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Eligibility depends on the asset sold, type of capital gain, taxpayer status, amount of gain and any qualifying reinvestment. The relevant exemption section must be checked against the facts of the transaction.
A tax professional can help determine which exemption provisions may apply.
A tax professional can help determine which exemption provisions may apply.
30. Are senior citizens exempt from capital gains tax?
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Senior citizens are not automatically exempt from capital gains tax merely because of their age. Capital gains are subject to the applicable capital-gains provisions, although other income-tax provisions may affect their overall tax liability.
View Income Tax Department – Capital Gains
View Income Tax Department – Capital Gains
31. What assets are exempt from capital gains tax?
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Not every asset is automatically exempt from capital gains tax. Tax treatment depends on whether the asset is a capital asset and the applicable provisions of the Income-tax Act.
Certain transactions or assets may receive specific exemptions under the law.
View Income Tax Department – Capital Gains
Certain transactions or assets may receive specific exemptions under the law.
View Income Tax Department – Capital Gains
32. Do you have to pay capital gains tax if you are over 65?
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Being over 65 does not by itself make capital gains tax-free. Senior citizens must consider the applicable capital gains provisions for the asset sold. Their overall income-tax liability may be affected by provisions applicable to senior citizens.
View Income Tax Department – Capital Gains
View Income Tax Department – Capital Gains
33. Is there a time limit to pay capital gains tax?
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The applicable payment deadline depends on whether the taxpayer is required to pay advance tax or self-assessment tax. Advance tax is paid according to prescribed instalment dates, while self-assessment tax is generally paid before filing the income tax return when a balance liability is due.
Visit Income Tax e-Filing Portal
Visit Income Tax e-Filing Portal
34. Who usually pays for capital gains tax?
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The taxpayer who earns the taxable capital gain from transferring the capital asset is generally responsible for reporting the gain and paying the applicable tax.
The exact tax treatment depends on the taxpayer, asset and transaction.
The exact tax treatment depends on the taxpayer, asset and transaction.
35. What is the tax-free limit for senior citizens?
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The tax-free limit for senior citizens relates to their overall taxable income and the applicable tax regime; it is not a separate capital-gains exemption. Capital gains have their own rules, rates and exemptions.
Therefore, a senior citizen should calculate capital gains separately and then determine the overall income-tax liability.
Visit Income Tax e-Filing Portal
Therefore, a senior citizen should calculate capital gains separately and then determine the overall income-tax liability.
Visit Income Tax e-Filing Portal
36. What are the new income tax rules for senior citizens in 2026?
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Senior citizens should consider the income-tax rules applicable for the relevant financial year, including the selected tax regime, applicable slab rates, deductions and capital-gains provisions.
Capital gains continue to be governed by specific provisions and should not be treated as ordinary salary or business income.
Visit Income Tax e-Filing Portal
Capital gains continue to be governed by specific provisions and should not be treated as ordinary salary or business income.
Visit Income Tax e-Filing Portal