The deadline for the third advance tax instalment for FY26 is nearing on December 15. Taxpayers must understand who needs to pay, what constitutes advance tax liability, and the penalties for missing it. This payment is crucial under the Income Tax Act 1961.
India's tax calendar brings the third advance tax instalment deadline for the financial year 2025-26 (FY26) on December 15. This instalment requires eligible taxpayers to pay a portion of their anticipated tax liability in advance, as mandated by the Income Tax Act 1961.
Advance tax applies to individuals, self-employed professionals, and businesses whose tax liability exceeds certain thresholds, typically Rs 10,000 in a year. Senior citizens without business income are generally exempt. The payment helps avoid interest charges and penalties for underpayment.
Taxpayers can make the payment using Challan 280 through online portals or banks. Missing the deadline triggers interest under sections 234B and 234C of the Income Tax Act, at rates of 1% per month on the unpaid amount. For instance, failure to pay 90% of the total tax by March 15 can lead to additional charges.
The instalment schedule for FY26 includes 15% due on June 15, 45% on September 15, 75% on December 15, and the balance by March 15. Proper tax planning is advised to comply and minimize liabilities. This deadline coincides with ongoing ITR filing preparations, emphasizing timely financial management for millions of taxpayers.