New Delhi: The financial year 2025-2026 is drawing to a close. In just two days, the new financial year—2026-2027—will commence, marking a very significant period for the public. Starting April 1st, taxpayers will gain access to a new tax act that promises to eliminate complex terminology. On the other hand, taxpayers currently have one final opportunity.
By reviewing their income, taxpayers can rectify any errors or omissions regarding their advance tax payments. If this deadline is missed, then—in accordance with Income Tax regulations—taxpayers may be liable to pay higher interest charges. This would result in a financial burden for taxpayers and could prove to be a major setback for them.
Understanding Advance Tax
Advance tax implies paying your tax liability in instalments throughout the financial year, rather than paying the entire amount as a lump sum at the time of filing your income tax return. If your total tax liability—after deducting TDS (Tax Deducted at Source) and TCS (Tax Collected at Source)—exceeds ₹10,000, then paying advance tax becomes mandatory. However, senior citizens aged 60 years or older who do not derive any income from business or professional activities are exempt from this requirement.
Who is Required to Pay Advance Tax?
Salaried individuals with additional sources of income (such as interest earnings or capital gains), professionals and freelancers, and business owners whose TDS deductions do not fully cover their total tax liability are required to pay advance tax. If your total tax liability exceeds ₹10,000, paying advance tax is mandatory.
Why is the 31st the Most Crucial Date?
For your information, tax payments are typically made in four instalments: June, September, December, and March. However, March 31st holds the utmost significance. By this date, you must have paid at least 90 per cent of your total tax liability. Failure to do so will result in interest charges being levied under Section 234B. Even if you have missed previous instalments, you can still mitigate the burden of interest charges by paying the remaining tax amount before March 31st.
