As the financial year 2025–26 nears its end, taxpayers across India should take note of an important tax deadline. If your total tax liability for the year exceeds ₹10,000, the last date to pay the final installment of advance tax is March 15. Missing this deadline may lead to additional interest charges and penalties under the Income Tax Act.
Many taxpayers overlook advance tax obligations, especially if they have income sources beyond their salary. Paying the remaining tax amount before the deadline can help avoid unnecessary financial penalties later.
What Is Advance Tax?
Advance tax works on the principle of “pay as you earn.” Instead of paying the entire tax amount at the end of the financial year, taxpayers are required to pay their estimated tax liability in installments during the year.
If the total tax payable after adjusting TDS (Tax Deducted at Source) exceeds ₹10,000 in a financial year, the taxpayer must pay advance tax. This system helps distribute the tax burden across the year rather than requiring a large lump-sum payment at the end.
Who Is Required to Pay Advance Tax?
Advance tax is not limited only to business owners or professionals. Even salaried individuals may be required to pay advance tax if they have additional income that is not fully covered under TDS.
Such additional income sources may include:
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Rental income from property
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Interest earned from bank deposits
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Capital gains from stock market investments
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Freelance or consultancy income
In these situations, taxpayers must estimate their total income and pay advance tax accordingly.
Special Relaxation for Senior Citizens
There is a relaxation available for senior citizens. Individuals who are 60 years or older and do not have income from business or professional activities are generally exempt from paying advance tax.
However, if a senior citizen earns income through business or professional services, they must follow the same advance tax rules as other taxpayers.
Advance Tax Installment Schedule
To make tax payments manageable, the government divides advance tax into four installments during the financial year:
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June 15: At least 15% of the total estimated tax
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September 15: At least 45% of the total tax liability
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December 15: At least 75% of the total tax liability
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March 15: 100% of the total tax liability
The March installment is the final payment that ensures the taxpayer has paid the complete estimated tax for the year.
Penalties for Missing the Deadline
If advance tax is not paid on time, the Income Tax Department may charge interest under Sections 234B and 234C of the Income Tax Act.
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Section 234C: Applies when installments are delayed
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Section 234B: Applies if at least 90% of the total tax liability is not paid before March 31
In both cases, taxpayers may be required to pay interest at 1% per month on the unpaid tax amount.
How to Pay Advance Tax Online
Paying advance tax has become simple and can be done online within minutes. Taxpayers can follow these steps:
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Visit the Income Tax Department’s e-filing portal
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Select the “e-Pay Tax” option
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Choose Challan 100 (Advance Tax)
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Enter the required details and payment amount
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Pay through net banking, debit card, or UPI
After completing the transaction, it is important to save the payment receipt or challan, as it will be required while filing your income tax return.
Don’t Miss the Final Payment Window
With the financial year about to end, taxpayers should review their income sources and ensure that any pending advance tax is paid before March 15. Timely payment not only avoids penalties but also helps maintain smooth tax compliance.
Disclaimer: This article is for informational purposes only. Tax rules and liability may vary based on individual circumstances. Taxpayers are advised to consult a qualified tax professional or refer to official Income Tax Department guidelines before making tax payments.
