What is advance tax in Indian income-tax practice?
A Tax paid during income year
B Tax paid only after assessment
C A tax deduction certificate
D A refund from the portal
Answer: A. Tax paid during income year. Advance tax is income tax paid during the year on estimated current income, rather than waiting until return filing.
Under the 2025 Act, when does the general ₹10,000 threshold make advance tax payable?
A Gross salary reaches ₹10,000
B Tax payable reaches ₹10,000
C TDS exceeds ₹10,000
D A refund is below ₹10,000
Answer: B. Tax payable reaches ₹10,000. The Department states that advance tax applies when tax payable under its computation is ₹10,000 or more, subject to applicable rules.
What income figure is used to estimate advance tax?
A Last year’s bank balance
B Only salary from one employer
C Current income for the year
D The previous refund
Answer: C. Current income for the year. Advance tax is computed using estimated current income for the relevant financial or tax year.
When estimating advance tax, which credits are generally considered?
A Only last year’s refund
B Rent receipts and deposits
C Credit-card payments
D Expected TDS and TCS
Answer: D. Expected TDS and TCS. The advance-tax calculation accounts for tax expected to be deducted or collected at source.
When is advance tax normally paid?
A During the relevant year
B Only after the ITR
C After an audit notice
D At retirement
Answer: A. During the relevant year. Advance tax is paid in instalments during the year to which the estimated income relates.
Why is advance tax paid in instalments?
A To replace income reporting
B Pay tax across the year
C To remove TDS records
D To claim a new exemption
Answer: B. Pay tax across the year. Instalments spread payment through the income year instead of deferring all tax until year-end.
How does advance tax differ from TDS?
A Employer always pays it
B It is a tax exemption
C Taxpayer pays it directly
D It is a salary certificate
Answer: C. Taxpayer pays it directly. Advance tax is paid by the taxpayer; TDS is deducted or collected by another party under specified provisions.
How does advance tax differ from self-assessment tax?
A Paid after filing return
B It is deducted by employer
C It is a refund credit
D It is paid before year-end
Answer: D. It is paid before year-end. Advance tax is paid during the income year, while self-assessment tax settles remaining liability after return computation.
Does advance tax eliminate the need to file an applicable return?
A No, filing rules still apply
B Yes, payment replaces filing
C Only for salaried people
D Only for presumptive income
Answer: A. No, filing rules still apply. Paying advance tax does not replace an income-tax return required under applicable law.
Which period determines the advance-tax obligation?
A Date the return is filed
B Year in which income arises
C Date of a refund
D Date the bank posts interest
Answer: B. Year in which income arises. Advance tax relates to the year in which the estimated income is earned.
For most taxpayers, how many standard advance-tax instalments apply?
A One monthly instalment
B Two annual instalments
C Four instalments
D Six weekly payments
Answer: C. Four instalments. The standard schedule under section 408 of the 2025 Act has four instalments.
By 15 June, what minimum cumulative share of advance tax is due?
A 25%
B 45%
C 75%
D 15%
Answer: D. 15%. The first instalment is not less than 15% of the advance-tax amount.
By 15 September, what minimum cumulative share is due?
A 45%
B 15%
C 60%
D 100%
Answer: A. 45%. By the second instalment date, cumulative advance tax should reach at least 45%, reduced by prior instalments.
By 15 December, what minimum cumulative share is due?
A 45%
B 75%
C 50%
D 100%
Answer: B. 75%. By the third instalment date, cumulative advance tax should reach at least 75%, reduced by prior payments.
By 15 March, what cumulative share should generally be paid?
A 75%
B 45%
C 100%
D 15%
Answer: C. 100%. The fourth instalment completes the advance-tax amount by 15 March, after credit for earlier instalments.
How is the second instalment generally calculated?
A 45% plus all earlier payments
B 15% of gross salary
C The full tax again
D Cumulative 45% less earlier payments
Answer: D. Cumulative 45% less earlier payments. The September instalment brings cumulative payment to at least 45% of advance tax, after subtracting previous instalments.
If estimated advance tax is ₹1,00,000, what is the first minimum instalment?
A ₹15,000
B ₹45,000
C ₹75,000
D ₹1,00,000
Answer: A. ₹15,000. Fifteen percent of ₹1,00,000 is ₹15,000.
If total estimated advance tax is ₹1,00,000 and ₹15,000 was paid in June, what brings cumulative payment to 45% by September?
A ₹45,000 more
B ₹30,000 more
C ₹15,000 more
D ₹75,000 more
Answer: B. ₹30,000 more. Forty-five percent is ₹45,000; after ₹15,000 paid earlier, another ₹30,000 reaches the cumulative target.
What is due by December if total advance tax is ₹1,00,000 and ₹45,000 is already paid?
A ₹75,000 more
B ₹45,000 more
C ₹30,000 more
D ₹15,000 more
Answer: C. ₹30,000 more. The 75% cumulative target is ₹75,000; subtracting the earlier ₹45,000 leaves ₹30,000.
By March, what remains if ₹75,000 of a ₹1,00,000 liability is already paid?
A ₹75,000
B ₹15,000
C ₹1,00,000
D ₹25,000
Answer: D. ₹25,000. The final instalment completes the 100% cumulative amount, so ₹25,000 remains.
Can a taxpayer adjust later instalments if estimated income changes?
A Yes, revise remaining payments
B No, estimates are fixed
C Only the first payment changes
D Only after the return
Answer: A. Yes, revise remaining payments. Section 406(2) permits increasing or reducing remaining instalments to match revised estimated current income.
What should happen if taxable income rises after an instalment?
A Ignore it until refund
B Recalculate later payments
C Cancel earlier instalments
D Change the previous year
Answer: B. Recalculate later payments. A revised estimate can require higher payments in the remaining instalments.
If estimated income falls, can later advance-tax instalments be reduced?
A No, always pay twice
B Only after assessment
C Yes, use the revised estimate
D Only for salary income
Answer: C. Yes, use the revised estimate. A taxpayer may adjust remaining instalments to reflect a revised estimate of current income.
How do eligible presumptive-scheme taxpayers generally pay advance tax under section 408(2)?
A Four equal monthly payments
B One payment by 15 June
C Only after filing
D One instalment by 15 March
Answer: D. One instalment by 15 March. The 2025 Act requires eligible section 58(2) presumptive taxpayers to pay the full advance tax by 15 March.
Which date is the usual first standard instalment deadline?
A 15 June
B 15 March
C 15 September
D 31 December
Answer: A. 15 June. The first standard instalment is due on or before 15 June.
Which date is the second standard instalment deadline?
A 15 June
B 15 September
C 15 December
D 31 March
Answer: B. 15 September. The second standard instalment is due on or before 15 September.
Which date is the third standard instalment deadline?
A 15 September
B 15 March
C 15 December
D 30 April
Answer: C. 15 December. The third standard instalment is due on or before 15 December.
Which date is the final standard instalment deadline?
A 15 June
B 15 September
C 15 December
D 15 March
Answer: D. 15 March. The final standard instalment is due on or before 15 March.
Which Act governs advance tax for Tax Year 2026–27?
A Income-tax Act, 2025
B Income-tax Act, 1961
C Goods and Services Tax Act
D Companies Act, 2013
Answer: A. Income-tax Act, 2025. The Department says income earned in FY 2026–27 is chargeable under the Income-tax Act, 2025.
An advance-tax instalment for FY 2025–26 was due before April 2026. Which Act governs it?
A Income-tax Act, 2025
B Income-tax Act, 1961
C Both Acts together
D No Act applies
Answer: B. Income-tax Act, 1961. The Department says advance tax for FY 2025–26 remains governed by the 1961 Act even during the transition.
If old-year tax is paid after 1 April 2026, does payment date alone switch it to the new Act?
A Yes, every payment switches
B Only the bank decides
C No, income year controls
D It becomes TDS
Answer: C. No, income year controls. The governing Act is tied to the year to which the tax relates, not merely the later payment date.
What changed about advance tax in the 2025 Act?
A Advance tax was abolished
B Instalments became monthly
C The threshold was removed
D Presentation was simplified
Answer: D. Presentation was simplified. The Department says there was no policy change; the provisions were reorganized and clarified.
How can a taxpayer generally pay advance tax?
A Through authorized banking channels
B Only by cash at court
C Only through an employer
D By changing the ITR
Answer: A. Through authorized banking channels. Tax payments can be made through authorized banking channels, including electronic payment mechanisms.
When making a payment during transition, what period should be selected?
A The next calendar month
B Correct AY or Tax Year
C The employer’s TAN year
D Any available period
Answer: B. Correct AY or Tax Year. Selecting the correct assessment year or tax year ensures the payment is credited to the proper period.
Why does choosing the wrong tax period matter?
A The bank account closes
B Income becomes exempt
C Credit may post incorrectly
D TDS is reversed
Answer: C. Credit may post incorrectly. The Department cautions that AY and Tax Year selection must match the income period so the credit is assigned correctly.
What may apply if required advance tax is short-paid?
A The income is removed
B All TDS is cancelled
C The return becomes optional
D Interest may be charged
Answer: D. Interest may be charged. Shortfall or deferment can attract interest under the applicable provisions.
Which provisions in the 2025 Act cover interest for advance-tax shortfall or delay?
A Sections 424 and 425
B Sections 392 and 393
C Sections 123 and 124
D Sections 16 and 17
Answer: A. Sections 424 and 425. The Department maps advance-tax default and instalment interest to sections 424 and 425 of the 2025 Act.
What does the first instalment percentage measure?
A Share of gross salary
B Share of total advance tax
C Share of last year’s refund
D Share of TDS certificates
Answer: B. Share of total advance tax. The instalment percentages are cumulative portions of advance tax computed for the year.
If TDS is expected to cover the full estimated liability, what should be assessed?
A Gross salary again
B Only the first instalment
C Remaining advance-tax amount
D A new tax deduction
Answer: C. Remaining advance-tax amount. Advance tax is based on the estimated tax after taking account of tax expected to be deducted or collected at source.
Which income can create advance-tax liability beyond salary withholding?
A A refunded deposit
B A loan repayment
C A tax certificate
D Rent or interest income
Answer: D. Rent or interest income. Income such as rent or interest may increase tax payable beyond salary TDS and should be included in the estimate.
How should capital gains received during the year affect an estimate?
A Reassess current tax liability
B Ignore them until next year
C Subtract them as TDS
D Treat every gain as exempt
Answer: A. Reassess current tax liability. New income such as capital gains can change the estimated tax liability and later instalments.
Does paying advance tax create a deduction from income?
A Yes, it reduces gross income
B No, it is tax paid
C Only for business owners
D Only in June
Answer: B. No, it is tax paid. Advance tax is a payment toward tax liability, not a deduction from income.
What is a useful record after paying an instalment?
A A rent agreement
B A salary promotion letter
C Payment challan or receipt
D A bank loan offer
Answer: C. Payment challan or receipt. Keep the challan or payment receipt so the payment can be reconciled and claimed as a credit.
Why reconcile advance-tax payments before filing the return?
A Increase the tax slab
B Change the assessment year
C Replace salary records
D Confirm every payment credit
Answer: D. Confirm every payment credit. Reconciling payments helps ensure each instalment is correctly credited against the final liability.
What should be done if an advance-tax payment is missing from records?
A Check challan and tax portal
B Pay it again immediately
C Delete the return draft
D Claim a deduction instead
Answer: A. Check challan and tax portal. Verify the challan details and payment period, then resolve any missing credit through the official process.
How does Form 168 relate to advance tax for Tax Year 2026–27?
A It is the advance-tax challan
B It reflects new-year tax information
C It replaces section 408
D It is a TDS certificate
Answer: B. It reflects new-year tax information. The Department says Form 168 serves as the evolved Annual Information Statement for Tax Year 2026–27 and later periods.
Why estimate income more than once during a year?
A The Act changes every month
B Old instalments expire
C Income and credits can change
D TDS must be paid twice
Answer: C. Income and credits can change. Current income, tax credits, and deductions can change, so the estimate should be reviewed before remaining instalments.
What is a sound advance-tax routine?
A Wait until a tax notice
B Use gross salary only
C Ignore TDS credits
D Estimate, pay, and reconcile
Answer: D. Estimate, pay, and reconcile. Estimate current tax, pay required instalments by due dates, and reconcile payments with official records.
Estimated advance-tax payable is ₹9,500. Does it meet the general ₹10,000 threshold?
A No, it is below threshold
B Yes, every amount qualifies
C Only salary income counts
D Threshold is ₹5,000
Answer: A. No, it is below threshold. The general threshold is ₹10,000 or more; an estimated advance-tax amount of ₹9,500 is below it, subject to other applicable rules.
Can a standard advance-tax instalment be paid before its due date?
A No, only exact date
B Yes, pay before deadline
C Only after the ITR
D Only through an employer
Answer: B. Yes, pay before deadline. The instalment rules require payment on or before the due date, so payment can be made earlier.