Bengaluru, Karnataka – The clock is ticking for countless taxpayers across India! With June 15th just around the corner, it’s a critical reminder for individuals and entities alike to pay their first instalment of advance tax for the Financial Year 2025-26. Missing this deadline can lead to interest penalties, so it’s crucial to act now if you haven’t already.

What is Advance Tax?

Advance tax, also known as “pay as you earn” tax, is the income tax paid in advance rather than in a lump sum at the end of the financial year. The Income Tax Department mandates this for taxpayers whose estimated tax liability for the financial year exceeds ₹10,000. This includes income from salary, business profits, capital gains, house property, and other sources.

Why is June 15th So Important?

The Indian income tax law stipulates specific due dates for paying advance tax in instalments. For the current financial year (FY 2025-26), the first instalment, comprising 15% of your total estimated tax liability, is due by June 15, 2025.

Who Needs to Pay Advance Tax?

  • Individuals: Salaried individuals with significant income from other sources (like rent, interest, or capital gains) and self-employed professionals.
  • Businesses: Companies, partnerships, and LLPs.
  • Senior Citizens: Importantly, senior citizens (aged 60 years or more) who do not have income from business or profession are exempt from paying advance tax.

Consequences of Non-Payment or Short Payment

The Income Tax Act levies interest under Section 234B and 234C for default or deferment in payment of advance tax. Missing the June 15th deadline for the first instalment, or paying less than the required amount, will attract interest charges. This can add an unnecessary burden to your tax liability.

How to Calculate and Pay Your Advance Tax

  1. Estimate Your Total Income: Accurately project your income from all sources for the entire financial year 2025-26.
  2. Calculate Your Tax Liability: Determine your total tax payable on this estimated income, considering all applicable deductions and exemptions.
  3. Determine Your Instalment: The first instalment requires you to pay at least 15% of this total estimated tax liability.
  4. Payment Method: Advance tax can be paid online through the e-payment facility on the income tax department’s official website (www.incometax.gov.in) using Challan 280.9 You can also pay physically at designated bank branches.

Don’t Procrastinate!

While tax planning is an ongoing process, the deadline for the first advance tax instalment is a hard stop. It’s advisable to revisit your income projections and make the necessary payment without delay. If you’re unsure about your tax liability or how to calculate it, consider consulting with a tax professional.

Key Dates for Advance Tax Instalments (FY 2025-26):

  • June 15, 2025: 15% of the total tax
  • September 15, 2025: 45% of the total tax
  • December 15, 2025: 75% of the total tax
  • March 15, 2026: 100% of the total tax

Ensure you meet these deadlines to avoid penalties and contribute to a smooth tax compliance journey. Pay your advance tax instalment by June 15th and secure peace of mind!