Advance tax deadline is today: Key things to know
What's the story
The deadline for advance tax filing is today. Taxpayers whose estimated tax liability after TDS/TCS exceeds ₹10,000 are required to pay this installment. Advance tax is a 'pay-as-you-earn' system where taxpayers estimate their annual tax liability and pay it in installments throughout the financial year. The provisions related to advance tax are governed by Sections 403 to 410 of the Income Tax Act, 2025.
Taxpayer eligibility
Who is required to pay advance tax?
Every taxpayer, including salaried individuals, freelancers, professionals, and businesses, whose estimated tax liability for a financial year exceeds ₹10,000 after accounting for TDS/TCS is required to pay advance tax.
This includes those earning income from capital gains or interest on deposits.
Penalty details
What happens if you pay less advance tax?
If a taxpayer pays less advance tax than required by September 15, interest under Section 234C of the Income Tax Act is charged.
This interest is levied at one percent per month for three months on the shortfall amount, calculated against the 45% target for the installment.
However, if at least 36% of total estimated tax is paid by this date, no interest is charged for that particular installment.
Action steps
What if your income exceeds your estimate?
If a taxpayer's income exceeds their estimate and they have paid insufficient advance tax by September 15, they should re-calculate their projected annual income and tax liability after accounting for TDS, TCS, and eligible tax credits.
They should then pay the additional advance tax as soon as possible rather than waiting for the next installment date.
After covering the September shortfall, taxpayers must ensure that at least 75% of cumulative advance tax is paid by December 15.