Advance Tax Due Date Reminder: Secure Your 2nd Installment by September 15
The second quarter of the financial year is closing, which means the September 15 deadline for your second Advance Tax installment is rapidly approaching. Failing to estimate your income correctly or missing this deadline can lead to compounding penal interest.
Here is a comprehensive guide to understanding, calculating, and paying your second advance tax installment.
Who is Legally Required to Pay Advance Tax?
The “Pay As You Earn” scheme applies to almost everyone generating substantial income outside of a standard salary where TDS is fully deducted. You must pay advance tax if your total estimated tax liability for the financial year (after deducting TDS/TCS) is ₹10,000 or more.
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Salaried Individuals: If you earn significant additional income (e.g., rental income, capital gains from stocks/mutual funds, high-interest income, or dividends).
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Business Owners & Corporates: All companies, partnership firms, and LLPs.
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Freelancers & Professionals: Consultants, doctors, lawyers, and gig workers.
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Exemption: Resident senior citizens (aged 60 or above) who do not have any income from a business or profession are entirely exempt from paying advance tax.
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Presumptive Taxation (Section 44AD/44ADA): Taxpayers under this scheme do not pay quarterly; their single deadline for 100% advance tax is March 15.
Advance Tax Installment Schedule (Standard Taxpayers)
| Due Date | Cumulative Tax Payable | Amount to be Paid in this Quarter |
|---|---|---|
| On or before June 15 | 15% of total tax liability | 15% |
| On or before September 15 | 45% of total tax liability | 30% (45% minus what was paid in Q1) |
| On or before December 15 | 75% of total tax liability | 30% |
| On or before March 15 | 100% of total tax liability | 25% |
How to Calculate Your September 15 Liability (With Example)
You don’t need to know your exact year-end income, but you must make an accurate projection.
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Estimate Gross Income: Add up your expected salary, business profits, rent, interest, and capital gains for the entire financial year.
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Apply Deductions: Subtract your planned Chapter VI-A deductions (80C, 80D, etc.).
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Calculate Total Tax: Apply the current income tax slab rates (Old or New Regime) to your net estimated income.
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Deduct TDS/TCS: Subtract any tax that has already been deducted at the source by your employer, clients, or banks.
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Calculate the 45% Target: Multiply the remaining tax liability by 45%. Subtract any amount you already paid in the June 15 installment.
Practical Example: Mr. Sharma estimates his total net tax liability for the year (after TDS) to be ₹1,00,000.
By June 15: He paid 15% (₹15,000).
By Sept 15: He needs to reach 45% cumulative (₹45,000).
Payment Due Now: ₹45,000 (Target) – ₹15,000 (Already Paid) = ₹30,000.
Penalties for Missing the September 15 Deadline
The Income Tax Department is strict about timely collections. Shortfalls trigger mandatory interest:
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Section 234C (Shortfall in Installments): If your September payment falls short of the 45% target, you will be charged 1% interest per month for 3 months on the shortfall amount. (Note: A slight leniency is given if you pay at least 36% by Sept 15, avoiding 234C for this specific quarter).
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Section 234B (Default in Payment): If your total advance tax paid by the end of the financial year is less than 90% of the assessed tax, you will face an additional 1% interest per month starting from April 1 of the following year until the tax is fully paid.
Step-by-Step Online Payment Guide
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Visit the official e-Filing portal (incometax.gov.in).
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Navigate to e-Pay Tax (you can do this pre-login or post-login).
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Enter your PAN/TAN and verify via OTP.
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Select the Income Tax box and choose the correct Assessment Year (e.g., AY 2027-28 for FY 2026-27).
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Select Payment Type as Advance Tax (100).
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Enter the tax amount and pay via Net Banking, Debit Card, NEFT/RTGS, or UPI.
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Crucial: Download and save the Challan Receipt (CRN/BSR code) to report in your final ITR.
Expert Tax Planning with MLG Associates
Estimating income halfway through the year—especially when dealing with fluctuating business revenue or complex capital gains—can be tricky. Overpaying locks up your working capital, while underpaying triggers harsh penalties.
How MLG Associates can help:
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Accurate financial year income projections and tax slab optimization.
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Timely calculations of specific installments adjusting for dynamic capital gains.
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Complete management of your e-payments and challan documentation.
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Strategic advisory to maximize your deductions before the year ends.
Don’t let penal interest eat into your profits. Contact MLG Associates today to accurately calculate and file your Advance Tax before the September 15 deadline.
Website :- https://mlgassociates.in/
Youtube:- https://www.youtube.com/@SangeetGuptaFinsysERPSoftware
