Advance Tax Deadline: The last date for depositing the third installment of advance tax of income tax for the financial year 2025-26 is today (15 December 2025). Taxpayers whose annual tax liability exceeds Rs 10,000 in a financial year are required to pay advance tax. If at least 75 percent of the total estimated tax is not paid by this date, interest has to be paid under the Income Tax Act.
What is advance tax?
Advance tax means depositing the tax in installments before the end of the year. This rule applies to salaried people, freelancers, investors and businessmen, provided the tax liability after deducting TDS is Rs 10,000 or more. However, resident senior citizens aged 60 years and above, whose income is not from business or profession, do not have to pay advance tax.
Why is the deadline of December 15 necessary?
According to Avneesh Arora, Executive Director (Direct Tax), Forvis Majors India, “The December 15 deadline is an important checkpoint. If 75% of the total tax is not deposited by this date, interest under Section 234C of the Income Tax Act is certain, even if the tax is paid later while filing the return.”
How much advance tax is required to be paid by now?
Income Tax Department has set 4 deadlines for advance tax-
- Till June 15: 15% of estimated tax
- Till September 15: 45% of estimated tax
- By December 15: 75% of estimated tax
- By March 15: 100% of estimated tax
This deadline is especially important for freelancers, stock market investors and small businessmen, because regular TDS is not deducted on their income.
What will happen if tax is not paid today?
If you are not able to pay 75% of the total estimated tax by December 15, then under Section 234C, interest will be charged on the shortfall amount at the rate of 1% per month for three months (December to March). If even 90% of the total tax liability is not deposited by March 31, then under Section 234B, interest of 1% per month will also have to be paid, which will continue till the return is filed, i.e., delay in filing the return means the tax burden may increase further and at the time of return. You may have to pay a large lump sum amount.
How to deposit tax?
You can deposit the third installment of advance tax today by logging on to incometax.gov.in or through the net banking option of your bank. It is not wise to wait till March as this will further increase the tax outgo due to interest.
