Why September 15 Matters for Taxpayers
September 15 is a crucial date for taxpayers in India as it marks both the advance tax deadline and the income tax return (ITR) filing deadline. While salaried individuals usually have their advance tax covered through tax deducted at source (TDS), those earning from other sources—such as capital gains, rent, freelancing, or business income—must pay advance tax directly to the Income Tax Department.
Failing to pay advance tax on time can lead to penalties and interest charges under the Income Tax Act.
Who Is Required to Pay Advance Tax?
According to the Income Tax Department, anyone whose total tax liability exceeds ₹10,000 in a financial year is required to pay advance tax in instalments. This system ensures the government collects revenue throughout the year while helping taxpayers avoid a heavy lump-sum payment at year-end.
- Salaried taxpayers: Advance tax is usually settled through TDS.
- Business owners, freelancers, and consultants: Required to pay advance tax if annual liability crosses ₹10,000.
- Senior citizens (60+): Exempt from paying advance tax, provided they do not earn income from a business.
Advance Tax Payment Schedule Explained
Advance tax must be paid in four instalments, as per the Income Tax Department:
- June 15: 15% of annual tax liability
- September 15: 45% of annual tax liability (cumulative)
- December 15: 75% of annual tax liability (cumulative)
- March 15: 100% of annual tax liability
For example, if your total tax liability is ₹1,00,000, you should have paid ₹15,000 by June 15. By September 15 (today), you must cumulatively pay ₹45,000, which includes the first instalment.
What Happens If You Miss the Advance Tax Deadline?
Missing the September 15 deadline has financial consequences. Under Section 234C of the Income Tax Act, if you fail to pay 45% of your liability by this date, you will be charged 1% interest on the shortfall for three months—until the next instalment in December.
If you still underpay and fail to cover at least 90% of your total advance tax by March 15, you will face an additional penalty under Section 234B, which imposes another 1% monthly interest until you file your ITR.
