Advance Tax: Who Pays 75% by 15 December 2025, and Who Gets a Pass?

The third instalment of advance tax for FY26 is due on 15 December 2025, and taxpayers must ensure they meet the requirement to avoid interest and penalties. By this date, individuals liable for advance tax should have paid at least 75% of their total projected tax for the year. Here is a simple breakdown of who must pay now and who can safely skip it.

What Is Advance Tax?

Advance tax is a system where you pay your tax in parts through the year instead of waiting until the end. If your net tax liability exceeds ₹10,000 after all TDS deductions, you are expected to pay it in four instalments:

• 15% by 15 June
• 45% by 15 September
• 75% by 15 December
• 100% by 15 March

The December instalment is therefore one of the most important checkpoints for taxpayers.

Who Must Pay 75% by 15 December?

You must pay advance tax if your TDS does not cover your full tax liability. This includes:

Salaried Individuals With Additional Income

Even if your employer deducts TDS, you may still need to pay advance tax if you earn income from:

• Rent
• Interest
• Freelancing
• Capital gains
• Side business activities

Self-Employed Professionals and Businesses

Doctors, lawyers, consultants, freelancers, and business owners must estimate their annual earnings and pay 75% of the tax by 15 December.

Anyone With Taxable Income Over ₹10,000 (Post-TDS)

If your tax payable exceeds ₹10,000 in the financial year, advance tax rules apply.

Who Gets a Pass?

Several taxpayers are completely exempt from the 15 December payment:

Resident Senior Citizens (60+)

They do not need to pay advance tax as long as they do not have income from business or profession.

Salaried Individuals Fully Covered by TDS

If your employer’s TDS covers your entire tax liability and you have no other income, you do not need to worry about advance tax instalments.

Special Rules You Should Know

Presumptive Taxpayers (44AD, 44ADA, 44AE)

Those under presumptive tax schemes do not follow quarterly instalments. They must pay their entire advance tax by 15 March in one go, not by 15 December.

Irregular or Unpredictable Income

For income that cannot be estimated earlier, such as:

• Capital gains
• Lottery winnings
• Newly started business income
• Dividend income (except deemed dividends)

You are allowed to pay advance tax in the next immediate instalment without penalty.

Avoiding Penalties

To prevent interest under Sections 234B and 234C:

• Recalculate your income for FY26
• Adjust for TDS already deducted
• Pay the required amount before 15 December
• Track any new income that increases your tax liability

Timely adjustments help avoid unnecessary charges later.

Read more: LIC Launches Protection Plus and Bima Kavach: Key Features Explained.

Conclusion

The 15 December deadline is crucial for meeting the 75% advance tax requirement. While many taxpayers must pay now, clear exemptions exist for senior citizens and those fully covered by TDS. Understanding where you stand can help you stay compliant and avoid penalties.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.