Income Tax Alert: Pay First Advance Tax Installment of FY 25-26 by Due Date To Avoid Penalty:

Income Tax Alert: Pay First Advance Tax Installment of FY 25-26 by Due Date To Avoid Penalty Advance Tax is the income tax paid in advance in instalments during the financial year. The tax is required to be paid by salaried individuals, freelancers, business owners, companies, partnership firms, etc. As per section 208 of the Income Tax Act, 1961, advance tax is required to be paid by the assessee if their total tax liability during a financial year exceeds Rs. 10,000. Advance tax is paid in four instalments, and taxpayers must clear their 100% dues before the due date. If you miss the deadline, you will have to face penalties and interest charges. Senior Citizens who do not earn money from a business or profession are not required to pay advance tax.

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Advance Tax for FY 25-26 Due Date soon, Missing CII Could Trigger Capital Gain Tax Issues

Who Needs to Pay Advance Tax?

• Salaried Individuals, Freelancers and Businesses if their total tax liability for the relevant financial year as reduced by TDS/TCS is Rs. 10,000 or above.
• Senior Citizens (above the age of 60 years) having business income must pay Advance Tax.
• Persons selecting the presumptive taxation scheme for the financial year 2025-26 must pay advance tax in one payment by 15th march 2026.

Due Dates of Advance Tax installments

Pay First installments By This Date to Avoid Penalty

The first instalment of Advance Tax for FY 2025-26 is due by 15th June 2025. Taxpayers must pay the tax before this due date. Missing the deadline can result in penalty and interest charges. Non-Availability of CII to create problem In the Finance Act (2) of 2024, the Finance Minister removed the indexation benefit for long-term capital gains made after July 22, 2024, and reduced the tax rate from 20% to 12.5%. However, if a resident taxpayer sells an immovable property that was bought before July 23, 2024, they can still claim indexation. Without the Cost Inflation Index (CII), it is not possible to accurately calculate the capital gains on such property sales.