March 15 is due date for paying advance tax. What happens if you miss the deadline?
As per the Income-Tax Act, 1961, individuals whose estimated tax liability exceeds Rs 10,000 during the year are required to pay advance tax
New Delhi: The due date for paying the final instalment of advance tax for the financial year 2024-25 is March 15, failing to pay may attract a penalty, according to the Income Tax department.
As per the Income-Tax (I-T) Act, 1961, individuals whose estimated tax liability exceeds Rs 10,000 during the year are required to pay advance tax. This requirement applies even to salaried taxpayers, as their employers may only deduct tax from their salaries and not account for additional income like capital gains or interest from fixed deposits.
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However, there is an exemption for senior citizens who do not earn income from business or profession. They are not required to pay advance tax. For everyone else, advance tax is based on the income earned throughout the year, and the final instalment for FY 2024-25 is due on March 15.
Four Instalments
Advance tax payments are made in four instalments during the financial year: June 15, September 15, December 15, and March 15. The first instalment, due by June 15, requires payment of 15 per cent of the estimated tax liability.
By September 15, 45 per cent of the total tax due should be paid, 75 per cent by December 15, and 100 per cent by March 15.
For salaried individuals, employers deduct tax at source (TDS), and they may not account for other incomes such as rent, interest, and capital gains.
Therefore, taxpayers need to calculate their advance tax liabilities based on all sources of income, not just their salary.
How to pay
Taxpayers can visit the Income Tax Department’s official website to make the payment. After registering with their PAN, they can select the ‘e-pay tax’ option and choose ‘Advance Tax (100)’ as the payment type. Users will also need to select the correct assessment year (2025-26) to pay the advance tax.
Taxpayers who miss the March 15 deadline can still make the payment by March 31, but they will be charged interest for one month as per Section 234C of the I-T Act.
As per the norms, interest at 1 per cent per month will be charged on any shortfall in advance tax paid by the due dates of June 15, September 15, December 15, and March 15.
The penalty will apply if the tax paid is less than 12 per cent, 36 per cent, 75 per cent, and 100 per cent of the total due by these respective dates.
