It’s Saturday, June 14, 2025, and with the first advance tax instalment deadline for FY 2025-26 fast approaching tomorrow, June 15, there’s a common question buzzing: What happens if I pay on Monday, June 16, because the 15th is a Sunday?
Good News: You’re Likely in the Clear!
You can breathe a sigh of relief. According to CBDT Circular No. 676, issued on January 14, 1994, if an advance tax deadline falls on a public holiday (like a Sunday), the next working day becomes the official due date. This means that paying your first instalment on Monday, June 16, 2025, should not attract any penalty or interest.
Chartered accountant Dr. Suresh Surana also confirms this, stating, “In accordance with the Circular no. 676 of January 14, 1994, one can deposit the advance tax for the first instalment of FY 2025-26 on June 16, 2025 (Monday), since June 15, 2025, falls on a Sunday, without attracting any penalty or interest.”
Why the Confusion?
While electronic payment facilities make it easier to pay anytime, the old rules, like the 1994 circular, still hold significance. Some tax authorities might argue that with digital options, the holiday extension isn’t necessary. However, for now, the circular provides a clear legal basis for the extension.
A Quick Refresher on Advance Tax
Advance tax is applicable to salaried professionals, freelancers, and business owners who anticipate a tax liability exceeding Rs 10,000. It’s paid in four instalments throughout the financial year:
- First Instalment: 15% of your total tax liability, due by June 15. (For FY 2025-26, this is the one impacted by the Sunday.)
- Second Instalment: 45% (cumulative), due by September 15.
- Third Instalment: 75% (cumulative), due by December 15.
- Fourth Instalment: 100% (cumulative), due by March 15.
Don’t Forget About Interest on Late Payments!
Missing these deadlines can lead to interest charges under Section 234C of the Income Tax Act, at a rate of 1% per annum on the unpaid tax liability. This can add up to 12% by the year’s end. So, while you get a grace day for this first instalment, make sure you stick to the deadlines for the subsequent ones!
Plan Ahead for Smooth Sailing
Even with the flexibility for this particular deadline, it’s always wise to plan your tax payments in advance. Staying informed about tax regulations and leveraging electronic payment options can help you avoid last-minute stress and potential penalties. When in doubt, consulting a tax professional can provide clarity and ensure you’re fully compliant.