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The third Advance Tax installment is due by December 15, 2025. Taxpayers must pay at least 75 percent of their estimated tax or face penalties under Section 234C.
Advance Tax Payment Due Date
Advance Tax Payment Due Date: The deadline for the third installment of Advance Tax payment is approaching on December 15, 2025. Those who fail to do so will bear the monetary penalties. Advance Tax scheme allows taxpayers to pay tax in advance every quarter instead of paying a lump-sum amount at the end of the financial year.
The scheme of advance tax requires every assessee to estimate his current income and if tax liability on such estimated income exceeds the specified limit, the assessee is required to pay the estimated tax in instalments during the financial year itself. Thus, an assessee is required to pay tax as he earns and therefore the scheme of advance tax is also known as ‘Pay as you Earn Scheme’.
The 15 December advance-tax deadline is a crucial checkpoint, as by this date taxpayers must have paid at least 75% of their total estimated tax liability for the financial year.
Who Needs To File?
Advance tax is payable by any person, salaried or non-salaried, whose estimated total tax liability for the year is Rs 10,000 or more after adjusting for TDS, according to Avnish Arora, Executive Director, Direct Tax, Forvis Mazars India. “While salaried individuals usually meet this through monthly TDS, advance tax becomes necessary where TDS is insufficient,” he added.
However, a resident senior citizen (i.e., an individual of the age of 60 years or above) not having any income from a business or profession is not liable to pay advance tax.
What Happens If You Miss The Deadline?
Missing this deadline attracts mandatory interest under Section 234C of the Income-tax Act, even if the balance tax is paid later while filing the return.
Arora said that this deadline is especially important for freelancers, investors and small business owners, as their income is usually not subject to regular TDS. It is important to note that advance tax is payable on all kinds of income.
Any remaining tax after adjusting advance tax, TDS and other credits is paid as self-assessment tax at the time of filing the return, Arora added. “However, delay in paying advance tax results in interest for deferment and shortfall and can also lead to a heavy lump-sum outgo at the time of filing.”
If the assessee does not pay the advance tax in accordance with the specified due dates, he shall be liable to pay the following interest:
(a) Interest under section 234B for default in payment of advance tax
(b) Interest under section 234C for deferment of payment of advance tax.
How to pay advance tax?
The advance tax can be paid Online (electronically) or offline (through an authorized bank) by submitting the details in Challan No. ITNS 280. However, it is mandatory for a Company or a person (other than a company) who is required to get his accounts audited under section 44AB to pay the taxes through online mode only.
An assessee, who declares his business or professional income in accordance with the presumptive tax scheme of section 44AD or section 44ADA, is required to discharge the whole amount of his advance tax liability on or before March 15th of the previous year. Thus, he can pay 100% of the advance tax in a single instalment on or before March 15 of the previous year.
Click here to add News18 as your preferred news source on Google. December 06, 2025, 15:14 IST
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