Advance Tax Alert: Pay Your Dues Before March 15 To Avoid Penalties
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Advance tax requires taxpayers to estimate income and pay in installments if liability exceeds Rs. 10,000. Senior citizens without business income are exempt. Payments can be online or offline.
The due date for last installment of advance income tax return is March 15, 2025.
Advance tax is a system where taxpayers estimate their current income and pay taxes in installments throughout the financial year if their tax liability exceeds a certain limit. This ‘Pay as you Earn’ scheme applies to individuals with an estimated tax liability of Rs. 10,000 or more. However, senior citizens (60 years or older) with no business or professional income are exempt.
Advance tax payments can be made online or offline through authorized banks using Challan No. ITNS 280. Companies and individuals subject to tax audits under section 44AB must pay online.
What Are Due Dates For Advance Tax Installments?
The due dates and amounts for advance tax installments are: 15% by June 15th, 45% (less previous payment) by September 15th, 75% (less previous payments) by December 15th, and the remaining 100% by March 15th. Those declaring income under presumptive taxation schemes (sections 44AD/44ADA) must pay the entire amount by March 15th. Any tax paid by March 31st is considered advance tax.
| Instalment | The due date for payment of advance tax | Amount |
| First | On or before June 15th of the previous year | Not less than 15% of advance tax |
| Second | On or before September 15th of the previous year | Not less than 45% of advance tax as reduced by the amount paid in the earlier instalment |
| Third | On or before December 15th of the previous year | Not less than 75% of the advance tax as reduced by the amount paid in earlier instalments |
| Fourth | On or before March 15th of the previous year | 100% of advance tax as reduced by the amount paid in the earlier instalments |
What Are The Consequences Of Failure To Deposit Advance Tax?
If the assessee does not pay the advance tax in accordance with the specified due dates, he shall be liable to pay the following interest:
(a) Interest under section 234B for default in payment of advance tax
(b) Interest under section 234C for deferment of payment of advance tax.
Failure to pay advance tax on time attracts interest under sections 234B (default in payment) and 234C (deferment of payment).
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