Advance Tax Deadline: The last date for depositing the third installment of advance tax for the financial year 2025-26 is December 15. Failure to pay on time could result in both interest and penalties under the Income Tax Act, 1961.
Advance Tax Deadline: December 15th is the last date for depositing the third installment of advance tax for the financial year 2025-26. Failure to pay on time may result in interest and penalties under the Income Tax Act, 1961. Advance tax is a tax that is paid in installments throughout the year. It is not paid all at once when filing a return. Therefore, December 15th is a significant date, as 75% of the total tax liability must be paid by then.
What is advance tax?
If your total annual tax liability (after deduction of TDS) is ₹10,000 or more, you are required to pay advance tax. It is paid in four installments:
June 15: 15%
September 15: 45% (overall)
December 15: 75% (overall)
March 15: 100%
This means that by December 15, the government should receive three-quarters of the estimated tax for the financial year 2025-26.
Who is required to pay advance tax?
Salaried employees with income other than their salary.
Rent
Bank interest
Freelance income
Capital gains
TDS is deducted only on salary; you must pay advance tax on other income yourself.
Professionals
Doctors, lawyers, consultants, CAs, fashion designers, freelancers, etc.
Small and large business owners and traders
Investors
Those who earn income from stocks, mutual funds, F&O, crypto, or debt instruments.
Who is exempt?
You don’t have to pay advance tax if your tax liability after TDS is less than ₹10,000. You are a resident senior citizen above 60 years of age and do not carry on any business/profession. TDS has already been deducted on your entire income.
How to calculate advance tax?
Add the estimated income for the entire year.
Subtract exemptions and deductions.
Find the total tax by applying the tax slab.
Subtract the TDS deducted so far.
If the balance amount is ₹10,000 or more, advance tax is required.
What happens if you miss the due date?
If 75% of the tax is not deposited by December 15th, the department will charge interest under sections 234B and 234C. This interest could prove to be quite heavy for freelancers, consultants, traders, and those earning capital gains.
The post Advance Tax Deadline: Know who has to pay advance tax by December 15, if not paid then interest will be charged. first appeared on informalnewz.
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