The third installment of advance tax is approaching, and December 15 is an important date for taxpayers required to pay it for the financial year 2025-26. Pay your taxes on time to avoid penalties under the Income Tax Act, 1961. This can help distribute your tax burden more evenly and prevent the year-end rush.
Why do these Deadlines matter?
Individuals must make four quarterly advance payments between June 15 and March 15 of the relevant financial year. December 15 is the deadline for the third scheduled advanced tax payments. Under Section 234B and 234C, you will have to pay interest if you fail to pay the advance tax on time. This deadline is very crucial for many individuals who have an additional income, such as rent, interest, or capital gains, because their tax liability often changes throughout the year.
Who Needs to Pay This Installment?
Any taxpayer whose total tax liability for the year exceeds ₹10,000 after accounting for TDS must pay advance tax. While salaried individuals often rely on TDS deducted by their employer, they may still need to pay advance tax if they have additional income sources. Freelancers, consultants, and business owners must pay close attention to this requirement because their incomes tend to be variable. Updating your estimate and paying the required amount ensures you remain compliant and avoid interest penalties for underpayment.
Please also note that there are specific exemptions to advance tax liability. If your tax due after TDS is less than Rs 10,000, you are exempt from advance tax. Resident senior citizens aged 60 years or above who have no business or professional income do not have to remit this advance tax. Similarly, if all income is covered by TDS and there is no additional income, then you don’t have to pay advance tax.
Making your advance tax installment by December 15 not only protects you from penalties but also supports smoother financial planning for the rest of the year. A brief review of your income and tax position today will help you stay compliant and avoid unnecessary complications during the final tax filing season. Stay tuned for more updates like this on our finprov official website
