Advance Tax Payment 3rd Instalment: Taxpayers can pay advance tax online through the IT Department’s website or offline at banks
Meeting tax obligations on time is crucial for avoiding penalties and ensuring compliance with the law. With the financial year well underway, taxpayers are urged to stay updated on their advance tax commitments for the Assessment Year (AY) 2025-26. The third instalment, which involves a significant portion of the tax liability, is a key milestone in this process.
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Who Needs to Pay Advance Tax?
Advance tax is a method to ensure timely payment of income tax by individuals, businesses, and corporations whose annual tax liability exceeds Rs 10,000.
Advance tax applies to:
- Salaried individuals with significant non-salary income (such as rental, capital gains, or interest income).
- Self-employed professionals and businessperson.
- Corporates.
Senior citizens (aged 60 and above) who do not have income from a business or profession are exempt from paying advance tax.
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Advance Tax Payment Due Date
Taxpayers across the country are reminded that the third instalment of advance tax for the Assessment Year (AY) 2025-26 is due on December 15, 2024. This instalment requires taxpayers to pay 75% of their total tax liability for the Financial Year (FY) 2024-25 cumulatively.
Advance Tax Payment Dates
Advance Tax Payment Schedule
The Income Tax Department mandates advance tax payments to be made in four instalments throughout the financial year. Below is the schedule:
- 1st Instalment: 15% of total tax liability by June 15, 2024
- 2nd Instalment: 45% of total tax liability (cumulative) by September 15, 2024
- 3rd Instalment: 75% of total tax liability (cumulative) by December 15, 2024
- 4th Instalment: 100% of total tax liability (cumulative) by March 15, 2025
How to Pay Advance Tax?
Taxpayers can pay advance tax online through the Income Tax Department’s official website or offline at designated bank branches. It is crucial to calculate the tax liability accurately to avoid penalties or overpayments. Taxpayers should consider income from all sources, deductions, and exemptions while making the payment.
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Importance of Timely Payment
Timely payment of advance tax ensures compliance with tax laws and avoids unnecessary penalties or interest charges. It also allows the government to maintain a steady flow of revenue throughout the year, ensuring efficient fiscal management.
Taxpayers are advised to review their financials and make necessary calculations to meet the December 15 deadline for the third instalment. For further guidance, consult a tax professional or refer to the Income Tax Department’s official resources.
Implications of Missing Deadlines
Failure to pay the advance tax instalments on time can lead to penalties under Section 234B (for default in payment) and Section 234C (for deferment of instalments) of the Income Tax Act. These penalties involve interest charges on the unpaid amount, which can increase the taxpayer’s overall liability.
