Advance tax is called ‘pay as you make tax’ as you pay this tax when you get earnings. Paying advance tax implies paying your tax in instalments throughout the year. If your tax liability is more than Rs 10,000 then you require to pay the tax through 4 defined advance tax instalments throughout the year. The due date to pay advance tax for Q2 FY 25-26 (AY 26-27) is September 15, 2025. If you stop working to pay advance tax by the due date, you will need to pay chastening interests under Section 234C and Section 234B.
Who pays advance tax, what are chastening charges and what are necessary dates connected to the tax, understand in this article.
Who pays advance tax?
If you are a taxpayer with an overall tax liability of Rs 10,000 in a fiscal year, you require to pay advance tax. The tax does not use to employed private taxpayers whose company subtracts the appropriate quantity of TDS from their wage and who does not have any other earnings apart from wage.
The word appropriate is essential here considering that numerous professionals state that lots of employed people wind up paying big interest under Section 234C and 234B (in many cases) due to non-payment of advance tax on time for other earnings like capital gains, and so on. Specialists state it might occur regardless of the company subtracting TDS from the staff member’s income. The net tax liability is the approximated tax quantity minus the TDS (tax subtracted at source) within the fiscal year.
On the other hand, elderly people (people aged 60 or more) aren’t needed to pay advance tax if they do not have any earnings from service or occupation.
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What is the Q2 FY 25-26 due date to pay advance tax?
The due date to pay the 2nd quarterly instalment of advance tax for FY 2025-26 is September 15, 2025.
According to the Income Tax Act 1961, the due date schedule to pay advance tax are as follows:
For the existing FY 2025-26 (AY 2026-27), a specific taxpayer is needed to pay the very first advance tax payment by June 15, the 2nd by September 15, the 3rd by December 15 and the last by March 15, 2026.
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What will be the charge for missing out on the advance tax payment due date for Q2 FY 25-26?
The taxpayer requires to pay chastening interest under Sections 234B and 234C of the Income tax Act. A chastening interest of 1% each month or part thereof is enforced in each area. Area 234B uses to hold-ups beforehand tax payment or inadequate tax payment. On the other hand, Section 234C uses to the non-payment or underpayment of specific advance tax instalments.
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When interest under Section 234C shall be imposed?
The interest under Section 234C will be imposed if payment of advance tax in an instalment is less than the proposed portion (given up the above table). The interest will be imposed if:
- Advance tax paid on or before 15th June is less than 12% of the examined tax.
- Advance Tax paid on or before 15th September is less than 36% of the evaluated tax.
- Advance Tax paid on or before 15th December is less than 75% of the evaluated tax.
- Advance Tax paid on or before 15th March is less than 100% of the examined tax.
What are the remarkable cases where a shortage in payment of advance tax shall be disregarded for computation of interest under area 234C?
If a deficiency in payment of tax takes place on account of ignoring or failure to approximate the accrual of the list below earnings, then such shortage will be overlooked while identifying the interest under Section 234C:
- Gains developing from the transfer of capital properties;
- Any jackpots from lottery games, crossword puzzles, races consisting of horse races, card video games, or any other sort of betting;
- Newbie accrual of earnings under head’ Profits and gains from organization or occupation’;
- Dividend earnings.
This exception is readily available offered the assessee pays the entire quantity of tax in regard of such earnings as part of the staying instalments of advance tax which are right away due after the accrual of such earnings, or if no instalment is due, then such tax is paid before completion of the fiscal year.
