Missed India's advance tax deadline incurs penalties and interest

The deadline for making the fourth advance tax payment was March 15, 2025. Those who missed this date may face penalties under specific tax laws. Senior citizens who do not have business income are exempt from these penalties. Advance tax allows taxpayers to estimate their income and pay taxes in installments throughout the year. This system applies to individuals whose tax liability is Rs. 10,000 or more. Failure to make these payments on time can result in additional costs. If a taxpayer misses the deadline, they will incur simple interest of 1% per month for underpayment or non-payment under Section 234C. Furthermore, if they do not pay at least 90% of their total tax liability by the end of the financial year on March 31, additional penalties will apply under Section 234B. To minimize penalties, experts suggest that taxpayers should pay any owed amounts as soon as possible. They may also apply for a waiver of interest if they have valid reasons. By paying a lump sum before the end of the financial year, taxpayers can avoid some interest charges. While certain penalties are mandatory, there are steps taxpayers can take to reduce their interest liability. These include paying self-assessment tax before filing their income tax return and ensuring correct TDS deductions. Taxpayers facing genuine hardship may request a waiver or reduction of interest from tax authorities.