Taxpayers with high estimated annual liabilities are urged to pay the second instalment of advance tax by 15 September to avoid penalties, with the Indian tax department highlighting crucial rules for freelancers, traders, and salaried workers with additional income sources.
India’s tax department has issued a fresh reminder to taxpayers to settle the second instalment of advance tax by 15 September, warning that missing the deadline can trigger interest charges and other penalties. According to the department’s post on X, the clock is running out for those whose estimated tax bill for the year is high enough to fall under the advance tax rules. The message matters not just for companies, but also for traders, freelancers and salaried workers with income beyond wages.
Advance tax works on a pay-as-you-earn basis. The Income Tax Department says it applies when a taxpayer’s estimated net liability for the year, after credit for TDS, TCS and reliefs, exceeds ₹10,000. That can include professionals such as doctors, lawyers, chartered accountants and consultants, as well as business owners, online creators and salaried employees with rental income, capital gains or other taxable earnings. The common mistake, tax advisers say, is assuming that salary TDS covers every obligation.
The payment schedule is staggered through the year. The official portal says taxpayers should pay 15% by 15 June, 45% by 15 September, 75% by 15 December and the full amount by 15 March. For someone expecting a ₹1,00,000 tax bill, that means ₹45,000 should be paid by 15 September if the June instalment was also made on time.
Missing that deadline can be costly. Tax guides and the department’s own materials say short payment can attract interest under Section 234C, while a large shortfall across the year can also lead to interest under Section 234B. The rules are especially important for people with mixed income, because salary TDS does not automatically cover interest from fixed deposits, rent, dividends or gains from shares and mutual funds.
There are some important exceptions. Resident senior citizens aged 60 or above who do not have business or professional income are generally exempt from advance tax. Those using the presumptive taxation schemes under Sections 44AD or 44ADA may also have different instalment requirements. For everyone else, the safest step is to review Form 26AS, AIS and TIS, estimate the year’s income and pay promptly.
The department says tax can be paid online through the e-filing portal using the e-Pay Tax option. Taxpayers need to verify their PAN with an OTP, choose the correct assessment year, select “Advance Tax (100)” as the payment type and complete the transaction through net banking, debit card, RTGS, NEFT or UPI. Once payment is successful, the challan receipt should be saved for future reference and return filing.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
