Very important news for taxpayers. Only 3 days left. This urgent tax-related work must be completed within this time. According to the latest guidelines of the Income Tax Department, the last date for depositing the third installment of advance tax or ‘Advance Tax’ is December 15.
If you do not deposit the tax within this period, you may have to face a huge financial penalty.
The central government has warned taxpayers that if the advance tax is not deposited by the due date, both interest and penalty will have to be paid under the Income Tax Act. So, to avoid last-minute rush, check your tax calculations now.
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What is advance tax and why is it paid?
Generally, we know that tax has to be paid at the time of filing the income tax return after the end of the financial year. But according to the rules of the Income Tax Act, there is an opportunity to deposit the tax money in installments instead of paying it at once, which is called ‘Pay as you earn’ or ‘Payment according to income’. This is advance tax. However, remember that this rule is not applicable to all taxpayers. This rule has to be followed only if a certain income limit is crossed.
Who has to pay this advance tax?
According to the rules of the Income Tax Department, there are certain conditions for paying advance tax. The details are discussed below:
Rs. 10,000 rule: If the total tax payable by a taxpayer after deducting TDS is Rs. 10,000 or more, then he must pay advance tax.
Source of income: Any person – salaried employee, businessman or professional – can fall under this rule if their tax amount exceeds the said limit.
Third installment: At least 75 percent of the total estimated tax for the current financial year (2025-26 assessment year) must be deposited by December 15.
Special exemption for senior citizens
The Income Tax Act has provided some relief for senior citizens above 60 years of age. If a senior citizen does not have any income from business or profession, i.e., depends only on pension or interest, then they do not have to deposit this advance tax. They can settle the entire tax at the time of filing the return at the end of the year.
What can be done to avoid penalties?
If the December 15 deadline is missed, the Income Tax Department can take strict action.
Topic Description
Deadline December 15, 2025
75 percent of the total tax payable
Penalty Penalty charge at a fixed interest rate
According to economic analysts, if you forget to deposit your tax by December 15, then when you file your return later, you will have to calculate interest on the outstanding tax on a monthly basis. Even if you pay the entire tax, you will not be exempted from this interest. Therefore, to avoid unnecessary financial loss, settle your outstanding advance tax before December 15.
Note: This report is for informational purposes only. Consult your chartered accountant or tax advisor for any final tax-related decision.