Income Tax: Advance tax first instalment is due by June 15. Check if you are liable to pay

The Income Tax (I-T) department has shared a post reminding taxpayers that the last date to pay the first instalment of advance tax for financial year 2025-26 is June 15 i.e., this Saturday.

For the uninitiated – advance tax is supposed to be paid by all taxpayers whose tax liability is more than ₹10,000 – be it salaried persons, freelancers or business owners. Notably, only 15 percent of total tax liability is supposed to be paid by June 15.

Interest on tax liability

It is worth mentioning that taxpayers are supposed to file income tax return (ITR) at the end of the financial year before July 31 (Sept 15 for this year), however, the tax liability needs to be cleared during the end of the year to avoid accruing interest on tax liability.

Under section 234C of Income Tax (I-T) Act, taxpayers accrue interest at the rate of 1 percent per annum for unpaid tax liability. Payment of advance tax is imperative to avoid payment of this extra 1 percent which accumulates to 12 percent by the end of the year.

For instance, someone has a total tax liability of ₹1 lakh during the year. As per the 15 percent advance tax deadline, s/he is supposed to pay ₹15,000 by June 15. Else, s/he will have to pay interest on tax liability when he files his return in July next year.

Alternatively, if he clears his tax dues before advance tax deadlines, there will be no tax liability in July. And all he will have to do is file the return.

Dates to clear tax liability

The deadlines to pay advance tax are as follows: Taxpayers must pay 15 percent of total tax liability by June 15, 45 percent of tax by September 15, 75 percent of tax by Dec 15 and 100 percent by March 15.

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