Advance Tax Deadline Today: Pay 45% of your estimated tax by September 15 to avoid penalties

Who Must Pay Advance Tax

• Salaried individuals with taxable income over Rs.10,000
  
  

• Self-employed individuals and professionals
  
  

• Companies and business entities
  
  

• Non-Resident Indians (NRIs) with taxable income in India
  
  

• Senior citizens without business income are exempt but must pay if they have business earnings
  
  

How to Calculate Advance Tax

1. Estimate total income from all sources (salary, business, capital gains, rental, etc.).
   
   

2. Calculate total tax liability using applicable income tax slabs and deductions.
   
   

3. Subtract TDS already deducted by employers or others.
   
   

4. If the balance tax liability is Rs.10,000 or more, advance tax payments are due.
   
   

Installment Payment Schedule and Percentages

• June 15: 15% of estimated tax liability
  
  

• September 15 (today): 45% of tax liability minus amount already paid
  
  

• December 15: 75% minus amount paid
  
  

• March 15: 100% minus amount paid
  
  

Penalties for Late or Short Payment

Failure to pay advance tax by deadlines attracts interest penalties under Sections 234B and 234C of the Income Tax Act. Interest is typically charged at 1% per month on the shortfall amount. Even a one-day delay leads to interest being computed for the entire quarter. This penalty system encourages timely payment and tax compliance.

Key Points

• Advance tax helps spread tax payments throughout the year, improving cash flow.
  
  

• Use official calculators or tax consultant help to estimate accurately.
  
  

• Missing deadlines can result in costly penalties and interest charges.
  
  

• Those under presumptive taxation have a different payment option with the entire tax due by March 15, 2026.
  
  

Taxpayers should use this opportunity to arrange their payments to avoid penalties and remain compliant for FY 2025-26.