March 15 advance tax deadline: Who needs to pay and what happens if you miss it

advanbce taxxxx

• March 15 is the last date to pay advance tax for FY 2025–26
• Taxpayers owing over Rs 10,000 must pay to avoid interest
• Seniors without business income exempt from advance tax

Did our AI summary help?

With the financial year nearing its end, several important tax deadlines are approaching for taxpayers. One of the key dates to watch is March 15, which is the last day to pay the final instalment of advance tax for FY 2025–26. Taxpayers whose estimated tax liability exceeds Rs 10,000 must ensure timely payment to avoid interest charges on the outstanding amount.

Who should pay advance tax?

Under Section 208 of the Income Tax Act, “A taxpayer whose estimated tax liability for the financial year is Rs. 10,000 or more, after reducing tax deductible or collectible at source (TDS/TCS), is required to pay advance tax in four instalments,” said Gopal Bohra, Partner -Tax, N.A.Shah Associates.

The rule is applicable to all categories of taxpayers, including salaried individuals, freelancers, and businesses.

Senior citizens aged 60 years or above are exempt from paying advance tax if they do not have income from business or profession during the financial year. However, senior citizens who earn income from a business or profession are required to pay advance tax.

Advance tax is paid in four instalments across the financial year, allowing taxpayers to spread their tax payments over time instead of paying the entire amount at once.

The instalment schedule is as follows:

June 15: Minimum 15 percent of total tax liability

September 15: Deduct any already paid taxes and pay 45 percent (cumulative) of the advance tax.

December 15: After deducting any taxes that have already been paid, pay 75 percent (cumulative) of the advance tax.

March 15: Deduct any already paid taxes and pay the remaining advance tax balance.

The March 15 deadline, therefore, serves as the final chance to clear the full advance tax liability for the financial year.

What happens if a taxpayer misses the March 15 advance tax deadline?

Taxpayers missing the advance tax due dates will have to pay interest under Section 234C at 1 percent per month for the period of delay.

Additionally, one has to pay under Section 234B until the date of the actual payment. “If you fail to pay at least 90 percent of your total assessed tax by March 31, interest under Section 234B at 1 percent per month will apply from 1st April of the Assessment Year until the date of the actual payment. This is in addition to any interest already accrued under Section 234C for missing the quarterly installments,” said Chandni Anandan, Tax Expert at ClearTax.

“Taxpayers who ensure that 90 percent or more of their tax liability is paid by March 31 may avoid the levy of interest under Section 234B, though interest under Section 234C for shortfall in earlier instalments may still apply depending on the circumstances,” said Rahul Charkha, Partner, Economic Laws Practice.

• How should taxpayers correctly calculate their final advance tax liability?
• Estimate Total Income: Include salary, business profits, capital gains, and "Income from Other Sources" (like FD interest).
• Apply Deductions: Subtract eligible deductions under Section 80C, 80D, etc.
• Calculate Gross Tax: Compute tax based on the chosen regime (Old vs. New).
• Deduct TDS/TCS: Subtract all taxes already deducted or collected.
• Final Check: Ensure that by March 15, the total advance tax paid equals 100 percent of the calculated net tax.

How to pay advance tax?

• Visit the Income Tax e-filing portal and log in using your user ID and password.
• After logging in, go to e-File and select e-Pay Tax.
• On the top-right corner of the page, click on ‘New Payment’.
• You will see multiple payment options such as TDS payment, equalisation levy, and income tax. Select ‘Income Tax’ (this includes advance tax and self-assessment tax) and click ‘Proceed’.
• Select the Assessment Year 2026–27 and choose Minor Head ‘Advance Tax’ (Code 100).
• Enter the relevant tax details such as tax amount, surcharge, cess, interest, and other applicable components.
• Choose your preferred payment mode and click ‘Pay Now’ on the next page.
• Review the terms and conditions, agree to them, and complete the payment using the selected payment method.