What's the penalty for not paying advance tax on time?
What's the story
The advance tax payment deadline for the financial year 2025-26 in India is today. The 'pay as you earn' scheme mandates taxpayers to estimate their income and pay taxes in installments during the fiscal year. Anyone with a total tax liability of ₹10,000 or more after TDS deductions is required to pay advance tax. This includes salaried individuals with additional income, freelancers, professionals, and businesses.
Payment methods
Online and offline payment options
Advance tax can be paid either online or offline by filling out details in Challan No. ITNS 280. However, companies or individuals whose accounts need to be audited under Section 44AB have to pay taxes only through the online mode. The due date for the third installment of advance tax for FY 2025-26 is today.
Penalty details
Deadlines and penalties
The advance tax payment is divided into four installments: 15% by June 15, 45% by September 15, 75% by December 15, and 100% by March 15 of the financial year. If you miss these deadlines or pay less than required, you will have to pay interest under Sections 234B and 234C of the Income Tax Act. This interest is charged at a rate of 1% per month or part thereof on the unpaid amount.