Can You Claim Deductions Under Sections 80C, 80D, Etc., While Paying Advance Tax?

Paying your income tax liability in instalments as the income is received during the fiscal year, rather than waiting until the end of the year, is known as advance tax. You are permitted to deduct from your total taxable income any allowable deductions and exemptions that you anticipate claiming throughout the year in order to determine your advance tax liability. It's crucial to only consider deductions you are certain you may claim when computing advance tax. Avoiding interest penalties, staying ahead of your obligations, and coordinating your tax and financial objectives are all made possible by paying your taxes in advance. Therefore, the Income Tax Act requires you to pay advance tax if your total tax due for the year surpasses Rs 10,000, but are you able to claim deductions under Sections 80C and 80D? Let's pay attention to Charu Pahuja, CFPCM, Group Director & COO of Wise Finserv, for her response, stated below.

When we talk about income tax planning, most people think of March, Form 16, and last-minute investments. But if your total tax liability for the year exceeds Rs 10,000, the Income Tax Act expects you to pay advance tax-and not just wait till filing your return.

What is Advance Tax?

Advance tax refers to paying your income tax liability in parts throughout the financial year, as your income is earned, instead of waiting until the year ends. This "pay-as-you-earn" mechanism ensures a steady inflow of revenue for the government and helps you avoid interest penalties for late payment.

Who is Required to Pay Advance Tax?

Advance tax is applicable to:

• Salaried individuals
• Freelancers and consultants
• Businesses (including professionals and entrepreneurs)

But here's a key exception:

Senior Citizens (aged 60 or more) without any income from business or profession are not required to pay advance tax, even if their tax liability exceeds Rs 10,000.

Only those senior citizens with business income are liable to pay advance tax.

This provision is especially helpful for retirees living on pension, interest, or rental income.

Presumptive income for businesses & professionals- The taxpayers who have opted for the presumptive taxation scheme under section 44AD have to pay the whole amount of their advance tax in one instalment on or before 15th March of the Financial Year. They also have the option to pay all of their tax dues by 31st March.

Can You Claim Deductions Under 80C, 80D, 80G, etc. While Calculating Advance Tax?

While calculating your advance tax liability, you are allowed to reduce your total taxable income by all eligible deductions and exemptions you expect to claim during the year.
Some of the most commonly claimed deductions include:

Section 80C

• Life insurance premium
• ELSS (Equity Linked Savings Scheme)
• PPF (Public Provident Fund)
• NSC (National Savings Certificate)
• Children's tuition fees
• Home loan principal repayment
• Fixed deposits (5-year tax saver FD) (Maximum: Rs 1.5 lakh)

Section 80D

• Health insurance premium for self, spouse, children, and for parents (up to 25k) and for senior citizens up to 50 K. Preventive health check-up upto 5K is also added
• Also under sec 80DD upto 75k for medical expenses incurred on a dependent person with a disability. (Max up to Rs 1.25 lakh depending on the severe disability).

Section 80G

Donations to approved charitable institutions

Section 24(b)

• Interest on home loan (up to Rs 2 lakh under "Income from House Property")
• Other deductions like 80E (education loan interest), 80TTA/80TTB (interest from savings accounts for general/senior citizens), and more.

Key Consideration: Plan Realistically!

When calculating advance tax, it's important to include only those deductions you are confident of claiming. For instance, if you plan to invest in ELSS or PPF later in the year, make sure it's actually done before March 31st.

Overestimating your deductions can lead to underpayment of tax, which may result in interest penalties under Sections 234B and 234C.

Advance Tax Payment Schedule (For Individuals and Non-Corporate Assessees):

You can pay advance tax through the TIN-NSDL portal or via your bank's net banking interface under "e-Pay Tax."

Why This Matters?

Many individuals either ignore or overpay advance tax due to lack of clarity about how deductions factor into the calculation. This results in:

• Locking up money unnecessarily with the government
• Facing interest penalties due to underpayment
• Confusion at the time of filing returns

By factoring in your planned Section 80C, 80D, 80G deductions early and making use of exemptions wherever applicable, you can optimize your tax outflow, manage cash flow, and stay compliant-all at once.

Final Thoughts

Tax planning isn't just a year-end activity-it's a year-round strategy. Advance tax is a smart way to stay ahead of your liabilities, avoid interest penalties, and align your financial and tax goals.

So before you make your next advance tax payment, take time to:

• Estimate your total income
• Account for eligible deductions
• Pay the correct installment on time

A little planning now goes a long way in saving money and stress later.