Taxpayers must pay 45% of their total tax liability as the second instalment of advance tax by September 15, 2025, to avoid penalties and interest.
Saloni Kumari | Sep 15, 2025 |
Advance Tax Deadline 15 Sept 2025: Avoid Interest Charges Under Sections 234B and 234C
The due date to submit the second instalment of advance tax for the financial year 2025-26 (assessment year 2026-27) is September 15, 2025. Every taxpayer whose tax liability for a financial year is more than Rs. 10,000 is required to pay advance tax in instalments.
Missing the deadline for advance tax submission will not only increase your financial burden but can also lead to interest charges under Sections 234B and 234C of the Income Tax Act.
Usually, salaried employees have their tax deducted automatically through TDS (Tax Deducted at Source). However, if you earn income from sources like capital gains, rent, or a side business, you need to pay advance tax on that income. Freelancers and consultants also have to pay advance tax if the tax they owe is more than Rs. 10,000. Senior citizens (60 years or older) are not required to pay advance tax if they do not possess any business income.
The Income Tax Department has set four instalment deadlines for paying the advance tax:
For instance, if your annual due is Rs. 2 lakh, meaning by the first instalment (June 15), you should already have paid Rs. 30,000, and by September 15, 2025, you have to pay Rs. 60,000 as the second instalment. Then you will have completed paying the cumulative payment of a total of Rs 90,000. Delay in paying any instalment may attract interest.
If you are unable to pay 45 per cent advance tax by September 15, then you will be charged 1 per cent interest per month on the shortfall for three months, under Section 234C.
If you keep underpaying your tax and do not deposit at least 90% of your total tax by March 31, the government will charge extra interest under Section 234B. This means 1% per month on the remaining tax until you pay it when filing your ITR.
| Advance Tax Payment Due Date | Gain Tax Liability | Advance Tax Due for June Transaction (Rs) | Advance Tax Due for Sep Transaction (Rs) | Total Advance Tax Due Each Qr | Interest Calculation | Interest to be Paid (Rs) |
| 15 June: 15% of Tax Liability (TL) | 1,00,000 | 15,000 | – | 15,000 | 15000*1%*3 mths | 450 |
| 15 Sep: 45% of TL | 1,00,000 | 45,000 | 45,000 | 90,000 | 90000*1%*3mths | 2,700 |
| 15 Dec: 75% of TL | – | 75,000 | 75,000 | 1,50,000 | 150000*1%*3mths | 4,500 |
| 15 March: 100% of TL | – | 1,00,000 | 1,00,000 | 2,00,000 | 2,00,00*1%*1 mth | 2,000 |
| Interest u/s 234B (Rs) | 200000*6*1% | – | – | – | – | 12,000 |
| Interest u/s 234C (Rs) | 450+2700+4500+2000 | – | – | – | 9,650 | |
| Total Interest to be Paid (Rs) | – | – | – | – | – | 21,650 |
| Total Tax + Interest to be Paid at the Time of ITR (Rs) | – | – | – | – | – | 2,21,650 |
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