The last date for depositing the fourth and final installment of advance tax for the financial year 2025-26 has been fixed as March 15, 2026. Taxpayers on whom advance tax is applicable are required to pay 100% of their total estimated tax liability by this date. If tax is not deposited within the stipulated time, interest and penalty may be imposed by the Income Tax Department.
It is not necessary for all people who file income tax returns every year to pay advance tax. But if the annual tax liability of a person is more than Rs 10,000 and the tax remains even after deducting TDS, TCS or other tax credits, then he has to deposit advance tax. However, senior citizens, whose income comes only from pension or interest and who do not have any business or professional income, are exempted from this tax.
The rules apply to these people
Advance tax usually has to be paid by those who have multiple sources of income, such as freelancers or consultants, those earning capital gains from the stock market or mutual funds, those receiving rental income, those earning interest from fixed deposits or other investments and those doing business.
Employed people may also need
Generally, the tax of salaried employees is already deducted by their employer through TDS, hence they do not need to pay advance tax separately. But if an employee has income from stock market, cryptocurrency or any other additional source during the year, then it may be necessary to deposit advance tax by estimating tax on that amount.
Complete schedule of advance tax
- 15 June 2025: 15% of total tax
- 15 September 2025: 45% of total tax
- 15 December 2025: 75% of total tax
- 15 March 2026: 100% of total tax
What happens if there is late payment?
If advance tax is not deposited on time, interest may have to be paid under Section 234B and 234C of the Income Tax Act. According to tax experts, if there is additional income like bonus, dividend or capital gain in the middle of the year, then its tax should be included in the next advance tax installment and deposited. At the same time, it is necessary to pay tax on additional income received after March 15 by March 31.