Advance Tax Installment Due on 15th June: Your Guide for FY 2025-26

Advance Tax Installment Due on 15th June: Your Guide for FY 2025-26

As the new financial year moves forward, the first instalment of Advance Tax falls on 15 June. Paying on time keeps you clear of avoidable interest charges under the Income Tax Act and spreads your tax burden evenly across the year.

Who Must Pay Advance Tax?

Advance Tax applies when your total tax liability for the year (after TDS, TCS and other credits) exceeds ?10,000. That covers:

Salaried individuals: Only if you have extra income—capital gains, interest, rent or freelancing—that creates a tax gap beyond the tax deducted by your employer.
Professionals & businesses: Sole proprietors, partnerships, LLPs and companies with taxable profits.

Senior citizens (60+) without business or professional income are exempt.

Upcoming Advance Tax Installments for FY 2025-26

How Much Should Be Paid by 15th June?

The Income Tax Act prescribes a phased schedule for Advance Tax payments. For non-corporate assessees and companies alike, the first installment due by 15th June must cover 15% of the total estimated tax liability for the Financial Year 2025-26.

Example:
If the estimated total tax liability for the year is ?2,00,000, then ?30,000 (15% of ?2,00,000) should be paid by 15th June.

Aim for a realistic projection—too low invites interest for shortfall; too high ties up excess cash.

Why Pay Advance Tax?

1. Steady cash flow for you: Spreads the tax load across the year rather than a lump-sum in March.

2. No interest penalties: Late or insufficient payments draw interest under Sections 234B (shortfall) and 234C (deferment) at 1% per month.

Failure to pay the correct amount by each due date, even by a small margin, can impose interest @ 1% per month for shortfall or deferment.

Note: Business and profession under presumptive taxation (u/s 44AD/44ADA) are required to pay the entire tax in one installment by 15th March 2026.

Disclaimer: This material and the information contained herein is intended for clients and other Chartered Accountants to provide updates and is not an exhaustive treatment of such subject. We are not, by means of this material, rendering any professional advice or services. It should not be relied upon as the sole basis for any decision which may affect you or your business.