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The deadline for depositing the fourth and final installment of Advance Tax for the financial year 2025-26 has been set for March 15, 2026. Taxpayers to whom the Advance Tax provisions apply are required to pay 100% of their total estimated tax liability by this date. If the tax is not deposited within the stipulated time, the Income Tax Department may levy interest and penalties.

Not everyone who files an Income Tax Return annually is required to pay Advance Tax. However, if an individual's annual tax liability exceeds ₹10,000—and a tax balance remains even after deducting TDS, TCS, or other tax credits—they are required to deposit Advance Tax. Nevertheless, senior citizens whose income consists solely of pensions or interest—and who have no income from business or professional sources—are exempt from this tax.

Advance Tax is typically payable by individuals with multiple sources of income. This includes freelancers or consultants, those earning capital gains from the stock market or mutual funds, individuals receiving rental income, those earning interest from Fixed Deposits or other investments, and those engaged in business activities.

Salaried Individuals May Also Need to Pay
Generally, for salaried employees, tax is already deducted by their employer via TDS; therefore, they typically do not need to pay Advance Tax separately. However, if an employee earns income during the year from additional sources—such as the stock market, cryptocurrencies, or other avenues—it may become necessary to estimate the tax liability on that amount and deposit Advance Tax accordingly.

Complete Advance Tax Schedule
June 15, 2025: 15% of the total tax
September 15, 2025: 45% of the total tax
December 15, 2025: 75% of the total tax
March 15, 2026: 100% of the total tax

What Happens in the case of Late Payment?
If advance tax is not deposited on time, interest may be payable under Sections 234B and 234C of the Income Tax Act. According to tax experts, if additional income—such as a bonus, dividend, or capital gains—is received during the financial year, the tax liability arising from it should be included in and deposited along with the next advance tax installment. Furthermore, for any additional income received after March 15, it is mandatory to pay the corresponding tax by March 31.

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