Advance Tax Payment Cover Letter / Working
Work out and record each advance tax instalment, with the estimate, TDS adjustment and challan details.
Law version: FY 2025-26 (Income-tax Act, 1961); Tax Year 2026-27 onwards (Income-tax Act, 2025). Checked on 26 Sep 2026.
What it is
A taxpayer whose tax for the year after TDS and TCS is ₹10,000 or more pays advance tax in instalments during the year: 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March. Presumptive taxpayers under 44AD / 44ADA pay the full amount by 15 March. This was Sections 207 to 211 of the Income-tax Act, 1961 up to FY 2025-26; from Tax Year 2026-27 it is Sections 403 to 408 of the Income-tax Act, 2025. The working records the estimate and the payment for each instalment.
When it is used
- Businesses and professionals estimating tax for the year.
- Salaried people with large interest, rent or capital gains.
- Recording challan details for the return.
What the template covers
- Name, PAN, address and year
- Estimated total income and tax
- Expected TDS and TCS
- Net advance tax payable
- Instalment and amount paid
- Challan date, BSR code and serial number
Details you will need
The generator asks for the following. Fields marked with an asterisk in the form are required; the rest can be left blank and filled in later in Word.
Letter
Date
Assessee
Name; PAN; Address; Financial Year / Tax Year; Type
Computation
Estimated Total Income for AY (₹); Estimated Tax Liability (before TDS, ₹); Expected TDS / TCS (₹); Net Advance Tax Payable (₹)
Instalment
This Payment is for Instalment; Amount Paid in This Instalment (₹); Challan 280 Date; BSR Code of Bank; Challan Serial Number
Stamp duty, registration and filing
Shortfall in instalments attracts interest (Sections 234B and 234C up to FY 2025-26; Sections 424 and 425 from Tax Year 2026-27). Resident senior citizens without business income are exempt from advance tax. Payment is made online through the e-filing portal. Check the current rules on incometax.gov.in.
Advance tax for Tax Year 2026-27 is under Sections 403 to 408 of the Income-tax Act, 2025 (interest under Sections 424 and 425). Due dates and instalment percentages are unchanged.
Generate the Advance Tax Payment Cover Letter
Fill in the form and download the draft as a Word file. It is a general template, not legal or professional advice; have it reviewed for your facts before you sign or rely on it.
Need this checked against your facts, or the registration or filing that follows (e.g. TDS returns, ITR)? Contact SKAG and Associates
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Frequently asked questions
Who must pay advance tax?
Anyone whose tax for the year after TDS and TCS is ₹10,000 or more, except resident senior citizens without business income.
What happens if I miss an instalment?
Interest is charged on the shortfall for the period of delay.
Do salaried employees pay advance tax?
Usually not, as TDS covers salary, but they may need to if they have significant other income.
This page gives general information for reference only. Laws, stamp duty rates and filing requirements change and differ between States, so confirm the current position for your case. Related: all document templates · free tax calculators · compliance calendar and guides.