Advance tax is a crucial mechanism by which taxpayers in India pay their income tax liability in installments during the financial year rather than waiting until the end of the year.
For the financial year 2025-26, the Income Tax Department has set clear deadlines and payment percentages to ensure timely compliance and avoid interest penalties.
Taxpayers with an estimated tax liability exceeding ₹10,000 (after accounting for TDS and other deductions) must pay advance tax in four installments: 15% by June 15, 2025; 45% by September 15, 2025; 75% by December 15, 2025; and 100% by March 15, 2026.
These percentages reflect cumulative payments and are designed to facilitate gradual tax discharge throughout the year.
Special provisions apply to business owners and freelancers who have opted for presumptive taxation under sections 44AD and 44ADA, allowing them to pay 100% of their advance tax by the final due date in March 2026.
Salaried individuals typically have taxes deducted at source (TDS) but are required to pay advance tax if they earn additional income—such as rental income, capital gains, or interest—that results in tax liability beyond ₹10,000.
Failure to comply with advance tax deadlines attracts interest penalties under Sections 234B and 234C of the Income Tax Act, emphasizing the need for proactive tax planning.
Advance tax payments can be made easily online using Challan 280 through the official Income Tax Department portal or authorized banks, ensuring convenience and efficient record-keeping.
Understanding and adhering to advance tax schedules not only helps taxpayers avoid last-minute tax burdens but also improves cash flow management and reduces the risk of costly interest charges.
As the second installment deadline approaches on September 15, taxpayers should evaluate their income and tax liability carefully to make timely payments and maintain compliance with tax regulations for FY 2025-26.
This structured approach to tax payment reflects the government’s effort to streamline revenue collection while giving taxpayers flexibility and clarity in managing their tax obligations.
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