Taxpayers who are required to pay advance tax should take note of an important deadline. The fourth and final installment of advance tax for the financial year 2025–26 must be paid by March 15, 2026. By this date, eligible taxpayers are required to clear 100% of their estimated tax liability for the year. Missing the deadline may lead to interest charges and penalties under the Income Tax Act.

Advance tax is commonly referred to as the “pay-as-you-earn” tax system, where taxpayers pay their estimated income tax in installments during the financial year instead of paying the entire amount at once while filing the Income Tax Return (ITR).

Below is everything taxpayers should know about the advance tax deadline, eligibility, and consequences of missing the payment schedule.

What Is Advance Tax and When Is It Applicable?

Advance tax is applicable when a taxpayer’s total tax liability for a financial year exceeds ₹10,000, even after deducting tax credits such as Tax Deducted at Source (TDS), Tax Collected at Source (TCS), and other eligible adjustments.

In such cases, taxpayers must estimate their annual income and pay taxes in four installments throughout the financial year. The purpose of advance tax is to ensure a steady flow of tax payments to the government rather than waiting until the end of the financial year.

However, certain taxpayers are exempt from paying advance tax.

Senior Citizen Exemption

Senior citizens aged 60 years or above are not required to pay advance tax if their income comes only from pension or interest and they do not have income from business or profession.

Who Typically Needs to Pay Advance Tax?

Advance tax is not limited to business owners. Many categories of taxpayers may fall under this requirement if their tax liability crosses the ₹10,000 threshold.

Taxpayers who often need to pay advance tax include:

• Freelancers and consultants earning professional income




• Individuals earning capital gains from shares or mutual funds




• People receiving rental income from property




• Investors earning interest income from fixed deposits or other instruments




• Business owners and self-employed professionals

If tax on such income is not fully covered by TDS or other deductions, the remaining tax must be paid through advance tax installments.

Do Salaried Employees Need to Pay Advance Tax?

In most cases, salaried individuals do not need to pay advance tax because employers deduct tax through TDS from salary income.

However, salaried taxpayers should still remain cautious. Advance tax may become applicable if they earn additional income during the financial year that is not covered by TDS.

Examples of such income include:

• Profits from stock market trading




• Cryptocurrency gains




• Rental income




• Freelance or side income




• Dividend income or bonuses

If such income increases the overall tax liability beyond ₹10,000, the taxpayer may be required to calculate and pay advance tax accordingly.

Advance Tax Installment Schedule for FY 2025–26

The Income Tax Department has structured advance tax payments in four stages during the financial year.

The schedule for Financial Year 2025–26 is as follows:

Due Date Minimum Tax Payable

June 15, 2025	15% of total estimated tax
September 15, 2025	45% of total estimated tax
December 15, 2025	75% of total estimated tax
March 15, 2026	100% of total estimated tax

The March 15 installment is the final payment, where taxpayers must ensure that their entire estimated tax liability for the year has been paid.

What Happens If You Miss the Advance Tax Deadline?

Failing to pay advance tax on time may attract interest charges under Sections 234B and 234C of the Income Tax Act.

• Section 234C applies when taxpayers fail to pay the required installment by the due date.




• Section 234B applies if at least 90% of the total tax liability is not paid before the end of the financial year.

The interest is calculated on the outstanding tax amount, which can increase the overall tax burden.

What If Additional Income Is Earned During the Year?

Tax experts advise taxpayers to update their tax calculations whenever they receive unexpected income, such as:

• Capital gains from investments




• Dividends




• Bonuses




• Business profits

If additional income arises during the year, the tax liability should be adjusted and paid in the next advance tax installment.

For income received after March 15, taxpayers can still deposit the tax before March 31, which will be treated as advance tax for the same financial year.

Final Reminder for Taxpayers

With the March 15, 2026 deadline approaching, taxpayers who are liable to pay advance tax should review their total income, calculate their estimated tax liability, and ensure that 100% of the tax due is paid before the deadline.

Timely payment not only helps avoid interest penalties but also ensures smooth filing of Income Tax Returns later in the year.

Staying compliant with advance tax rules is an essential part of responsible financial planning and helps taxpayers avoid unnecessary financial penalties.