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Advance Tax Deadline: Process And Penalty After You Miss The December 15 Payment
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Taxpayers who missed the third instalment deadline for advance tax in 2025-26 financial year may be liable to face interest charges.
The advance tax becomes mandatory if their TDS fall short and doesn’t cover the charges.(Representative Image)
The deadline to pay the third instalment of advance tax for the financial year 2025-26 passed for the taxpayers on Monday, December 15. Anyone whose income beyond salary from freelancing, business rents or investments amounted to tax liabilities over Rs 10,000 was required to make the advanced payment. Individuals who failed to comply with the deadline are now set to face interest charges.
The advanced tax is expected to be paid via scheduled instalments by both salaried and non-salaried brackets. The salaried class usually pays the advance tax through the monthly Tax Deducted at Source (TDS). The advance tax becomes mandatory if their TDS fall short and doesn’t cover the charges.
Advanced Tax Instalments
The advanced tax is paid across four instalments during a financial year. At each stage, taxpayers are required to pay a part of their estimated annual tax liability. The period begins from June and spans till March the following year. The deadlines and portions for each tax payment are as following:
15 per cent of estimated tax liability – By June 15
45 per cent of estimated tax liability – By September 15
75 per cent of estimated tax liability – By December 15
100 per cent of estimated tax liability – By March 15
Failure To Pay Advanced Tax Instalments
If a taxpayer misses the December 15 advanced tax instalment deadline, they face no outright penalty for the same, according to the Income Tax Act. However, interest charges are imposed on such individuals for shortfall or late payments under the 1961 Income Tax Act.
Upon missing the deadline, a taxpayer is charged 1 per cent simple interest per month. The interest will be calculated for three months on the shortfall against the required 75 per cent advanced tax point by December 15.
Individuals who miss the deadline for the third instalment can also pay the remaining advance tax in one go before the 15 March deadline. No additional interest is charged for falling short of the year-end target if an individual covers the total advance tax dues eventually.
Who Is Exempted From Advance Tax Payment?
Not all taxpayers have to keep their thinking cap on for advance tax payments and deadlines in a financial year. Senior citizens, i.e., individuals aged 60 and above, who receive no income from business or profession, are exempted from advance tax payments.
“These individuals are not required to pay advance tax even if they receive a pension, interest, or capital gains income,” said Namit Saxena, Special Public Prosecutor and Income Tax India official, as quoted by The Mint.
Delhi, India, India
December 16, 2025, 18:10 IST
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