Advance Tax 2025-26: Second Installment Due by March 15, Avoid Penalties
The Income Tax Department has reminded taxpayers that the second installment of advance tax for the financial year 2025-26 (Assessment Year 2026–27) is due on March 15, 2025. Failure to pay on time may attract penalties and interest.
Who is Required to Pay Advance Tax?
According to Section 208 of the Income Tax Act, any individual whose estimated tax liability for the year is ₹10,000 or more must pay advance tax in installments.
Who is Exempt from Paying Advance Tax?
Resident senior citizens aged 60 years or above during the financial year, who do not have income from business or profession, are not required to pay advance tax.
Advance Tax Payment Schedule
Advance tax must be paid in four installments:
- 15th June: At least 15% of the total estimated tax liability
- 15th September: At least 45%
- 15th December: At least 75%
- 15th March: Full payment (100%)
Taxpayers who opt for the presumptive taxation schemes under Section 44AD or 44ADA are required to pay the entire advance tax only by March 15. Any tax paid up to March 31 will be considered as advance tax. If a due date falls on a bank holiday, the payment should be made on the next working day.
Interest and Penalty on Late Payment
Interest at 1% per month is charged for any shortfall in advance tax paid by the due dates. Penalties apply if the advance tax paid falls short of the required percentages on the respective dates:
- Less than 12% by June 15
- Less than 36% by September 15
- Less than 75% by December 15
- Less than 100% by March 15
Taxpayers are advised to ensure timely payment to avoid unnecessary interest and penalties.
