Greetings from APMH! The 4th and final installment of Advance Tax for FY 2025-26 falls due on 15th March 2026. Every assessee whose expected tax liability exceeds ₹10,000 for the year is required to pay 100% of the annual tax liability on or before this date.
What is Advance Tax?
Advance Tax is the income tax payable in advance rather than as a lump sum at the end of the financial year. Also known as "Pay As You Earn" tax, it is payable in installments during the year in which income is earned. The obligation arises when the estimated tax liability of the taxpayer for the current financial year is ₹10,000 or more.
The Advance Tax mechanism ensures a steady flow of revenue to the government throughout the year while preventing taxpayers from facing a large tax burden at year-end. Non-payment or short-payment of advance tax attracts mandatory interest under Sections 234B and 234C of the Income Tax Act, 1961.
Important: Even if a taxpayer expects a refund for the year, Advance Tax obligations may still apply if total tax liability before considering TDS exceeds ₹10,000. Consult your tax advisor for a precise calculation.
Advance Tax Installment Schedule — FY 2025-26
Advance Tax is payable in four installments for all taxpayers (other than those covered under the presumptive taxation scheme). The installment schedule for FY 2025-26 is as follows:
| Installment | Due Date | Cumulative % of Tax Payable | Status |
|---|---|---|---|
| 1st Installment | 15th June 2025 | 15% of estimated tax | ✅ Completed |
| 2nd Installment | 15th September 2025 | 45% of estimated tax | ✅ Completed |
| 3rd Installment | 15th December 2025 | 75% of estimated tax | ✅ Completed |
| 4th Installment | ⚡ DUE: 15th March 2026 | 100% of estimated tax | 🔴 ACTION REQUIRED |
For taxpayers opting for the presumptive taxation scheme under Sections 44AD or 44ADA, the entire advance tax is payable as a single installment on or before 15th March 2026.
Who Must Pay the 4th Installment
Individual & HUF
All individuals and HUFs with tax liability exceeding ₹10,000 after TDS credit must pay advance tax. This includes salaried individuals with additional income sources.
Business Entities
All companies, partnership firms, LLPs and other entities with expected tax liability exceeding ₹10,000 for FY 2025-26 are mandatorily required to pay advance tax.
Senior Citizens
Senior citizens of the age above 60 years are exempt from advance tax ONLY if they do not have income from business or profession. Those having business income must pay advance tax.
Presumptive Tax Taxpayers
Taxpayers under Section 44AD or 44ADA are not required to pay in quarterly installments — the entire advance tax must be paid in one shot by 15th March 2026.
Consequences of Non-Payment / Short Payment
Failure to pay advance tax or payment of insufficient advance tax attracts mandatory interest provisions under the Income Tax Act, 1961. These are not penalties (which can be waived) but statutory interest charges.
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SEC 234B Interest for Default in PaymentInterest at 1% per month (or part of a month) is levied on the shortfall between 90% of the assessed tax and the advance tax paid. This interest runs from April 1st of the assessment year until the date of payment of the tax.
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SEC 234C Interest for Deferment of Advance TaxInterest at 1% per month for 3 months is levied for shortfall in each quarterly installment (1% for 1 month for the last installment in March). This applies even if you ultimately pay the correct total advance tax but not in the prescribed schedule.
Key Reminder: Interest under Sections 234B and 234C is mandatory and cannot be avoided once the shortfall/delay occurs. The best protection is proactive payment on or before the due dates. Contact our office to compute your exact advance tax liability.
We request you to carefully review your estimated tax liability for FY 2025-26 and make the necessary payment of the 4th installment on or before 15th March 2026. Please get in touch with our office if you need assistance in computing your advance tax liability or making the payment to ensure timely compliance and avoid interest costs.
— APMH Consulting | Direct Tax Advisory Practice | www.apmhconsulting.com