Advance tax deadline September 15, 2025: How much penal interest you need to pay if you miss due date

Advance tax is known as ‘pay as you earn tax’ as you pay this tax when you receive income. Paying advance tax means paying your tax in instalments throughout the year. If your tax liability is more than Rs 10,000 then you need to pay the tax via four specified advance tax instalments during the year. The deadline to pay advance tax for Q2 FY 25-26 (AY 26-27) is September 15, 2025. If you fail to pay advance tax by the deadline, you will have to pay penal interests under Section 234C and Section 234B.

Who pays advance tax, what are penal charges and what are important dates related to the tax, know in this write-up.

Who pays advance tax?

If you are a taxpayer with a total tax liability of Rs 10,000 in a financial year, you need to pay advance tax. The tax doesn’t apply to salaried individual taxpayers whose employer deducts the correct amount of TDS from their salary and who does not have any other income apart from salary.


The word correct is important here since many experts say that many salaried individuals end up paying huge interest under Section 234C and 234B (in some cases) due to non-payment of advance tax on time for other income like capital gains, etc. Experts say it may happen despite the employer deducting TDS from the employee’s salary. The net tax liability is the estimated tax amount minus the TDS (tax deducted at source) within the financial year.

On the other hand, senior citizens (individuals aged 60 or more) aren’t required to pay advance tax if they do not have any income from business or profession.

Also read: House property received by an individual as a gift is taxable in these situations.

What is the Q2 FY 25-26 due date to pay advance tax?

The deadline to pay the second 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:

Due Date	Advance tax payment percentage
On or before June 15 (Q1)	15% of the net estimated tax liability
On or before September 15 (Q2)	45% of the net estimated tax liability minus advance tax already paid
On or before December 15 (Q3)	75% of the net estimated tax minus advance tax already paid
On or before March 15 (Q4)	100% of net estimated tax minus advance tax already paid

Hence, for the current FY 2025-26 (AY 2026-27), an individual taxpayer is required to pay the first advance tax payment by June 15, the second by September 15, the third by December 15 and the final by March 15, 2026.

Also read: Husband bought property for Rs 60 lakh jointly with wife; Income tax dept sent her notice for unexplained investments; she wins case in ITAT Delhi

What will be the penalty for missing the advance tax payment deadline for Q2 FY 25-26?

The taxpayer needs to pay penal interest under Sections 234B and 234C of the Income tax Act. A penal interest of 1% per month or part thereof is imposed in each section. Section 234B applies to delays in advance tax payment or insufficient tax payment. On the other hand, Section 234C applies to the non-payment or underpayment of individual advance tax instalments.

Also read: Even if you made zero capital gains income from sale of property you still need to pay tax in this situation; CA explains why

When interest under Section 234C shall be levied?

The interest under Section 234C shall be levied if payment of advance tax in an instalment is less than the prescribed percentage (given in the above table). However, the interest shall be levied if:

• Advance tax paid on or before 15th June is less than 12% of the assessed tax.
• Advance Tax paid on or before 15th September is less than 36% of the assessed tax.
• Advance Tax paid on or before 15th December is less than 75% of the assessed tax.
• Advance Tax paid on or before 15th March is less than 100% of the assessed tax.

What are the exceptional cases where a shortfall in payment of advance tax shall be ignored for calculation of interest under section 234C?

If a shortfall in payment of tax happens on account of underestimating or failure to estimate the accrual of the following income, then such shortfall shall be ignored while determining the interest under Section 234C:

• Gains arising from the transfer of capital assets;
• Any winnings from lotteries, crossword puzzles, races including horse races, card games, or any other sort of gambling;
• First-time accrual of income under head' Profits and gains from business or profession';
• Dividend income.

This exception is available provided the assessee pays the whole amount of tax in respect of such income as part of the remaining instalments of advance tax which are immediately due after the accrual of such income, or if no instalment is due, then such tax is paid before the end of the financial year.