Pay Advance Tax By December 15 To Avoid Interest

The third advance tax deadline is around the corner, and December 15 will matter to anyone who expects to owe tax beyond the tax deducted at source (TDS) this year. A recent report by the Financial Express points out that many taxpayers forget this instalment until the final quarter, only to face interest charges later. With just a few weeks left in the financial year, this date serves as a practical mid-year checkpoint.

Why This Instalment Deserves Attention

Advance tax works on a simple principle: pay your dues as you earn through the year. Anyone with a tax liability above Rs 10,000 must follow this system. By the December instalment, roughly seventy-five per cent of the estimated tax should already be paid. If there’s a shortfall, interest under Section 234C starts ticking—one per cent each month on the unpaid amount.

This deadline tends to catch people with mixed income streams. Salaried individuals who earn rent, dividends, interest, or capital gains often discover that their TDS hasn’t covered everything. Markets move, property income fluctuates, and bonuses or freelance projects can arrive unexpectedly. By the time these variations settle, December is usually when the actual picture becomes clearer. Missing this instalment leaves taxpayers with little room to adjust later.

There’s another point people forget: if someone reaches March without paying ninety per cent of their total tax, interest under Section 234B kicks in from April 1. The amount may seem small at first, but the longer it stays unpaid, the more it grows. The two sections together create a system where keeping up through the year is far easier than catching up at the end.

Who Has To Pay — And Who Doesn’t

Advance tax rules don’t apply across the board. Resident senior citizens who do not run a business are exempt. As long as their banks or other institutions deduct tax at source correctly, they need not worry about instalments.

Taxpayers on presumptive taxation plans have a different arrangement. Small businesses and independent professionals under this scheme can pay their entire advance tax by March 15 instead of breaking it into four parts. This suits those whose income doesn’t follow a monthly pattern.

Then there are capital gains. Since these can’t be predicted, the law allows taxpayers to pay tax on such gains in the next due instalment. The key is to include them once they occur; ignoring them until the end of the year leads straight to interest charges.

Better To Review Now Than Rush Later

Paying the December instalment on time isn’t merely a procedural task. It helps taxpayers avoid interest, keeps cash flow predictable, and reduces the stress that usually builds toward the financial year-end. A quick review of income, especially from sources outside salary, can prevent surprises in March.