ITR Deadline and Advance Tax Payments: How They Link
- PRITI SIRDESHMUKH
- 3 hours ago
- 8 min read
Advance tax payments and ITR deadlines are two sides of the same compliance framework under the Income Tax Act, 1961. While advance tax ensures that taxes are paid in installments throughout the financial year, the ITR deadline marks the final point of reporting and adjusting liabilities. Their link lies in timing, compliance, and penalties—failure in either can lead to financial costs and legal consequences. TaxBuddy simplifies this entire process by offering reminders, AI-driven calculations, and expert-assisted plans to help taxpayers manage both obligations smoothly.
Table of Contents
What is Advance Tax?
Advance tax is the system of paying income tax in instalments during the financial year rather than waiting until the end. It is also called the “pay-as-you-earn” system. Anyone whose estimated tax liability for a financial year is ₹10,000 or more is required to pay advance tax. This includes salaried employees, freelancers, professionals, and businesses.
Payments are made in four instalments based on estimated income:
By June 15: At least 15% of the total estimated liability
By September 15: At least 45% of the total estimated liability, minus tax already paid
By December 15: At least 75% of the total estimated liability, minus tax already paid
By March 15: The entire 100% of the estimated liability
Taxpayers opting for presumptive taxation schemes under Sections 44AD, 44ADA, or 44AE may follow a simplified schedule where the full tax amount is paid in a single instalment by March 15. The purpose is to avoid a heavy lump-sum payment at year-end and ensure steady revenue for the government.
What is the ITR Deadline?
The ITR deadline is the last date for filing the annual income tax return. For FY 2024-25 (AY 2025-26), the standard deadline for individuals and non-audited cases is September 16, 2025, following an extension due to portal issues. For businesses requiring audits, the deadline is October 31, 2025, and for those with transfer pricing reports, it extends to November 30, 2025.
Missing the deadline has direct consequences. Taxpayers may still file a belated return by December 31 of the assessment year, but they will incur penalties under Section 234F and interest under Section 234A. Moreover, delaying filing can also postpone refunds and create compliance issues for loans, visas, or financial verifications.
How Advance Tax Payments and ITR Deadlines are Linked
Advance tax and ITR deadlines work hand in hand. Advance tax ensures that taxpayers pay their dues gradually during the year, while ITR filing reconciles the total liability with taxes already paid. When filing the return, advance tax paid is adjusted against the final liability. If more tax has been paid than required, a refund is issued. If less, the balance is payable along with interest.
Failure in either stage results in costs. Late or insufficient advance tax attracts interest under Sections 234B and 234C, while missing the ITR deadline leads to penalties and late fees. Together, they form a compliance cycle where both timely payments and timely reporting are equally important.
Impact of Non-Compliance on Taxpayers
Non-compliance with tax obligations not only creates immediate financial burdens but also affects long-term financial credibility and legal standing. The consequences are multi-layered and can have a lasting impact if ignored.
One of the primary consequences is the imposition of interest on unpaid or delayed advance tax. Under Sections 234B and 234C of the Income Tax Act, taxpayers who fail to pay the required installments of advance tax or who pay less than the prescribed percentage are liable to pay interest on the shortfall. This additional cost increases the total tax liability and makes year-end payments significantly heavier.
Missing the Income Tax Return deadline results in a statutory penalty under Section 234F. For individuals with an income above ₹5 lakh, the penalty can go up to ₹5,000, while those earning below this threshold face a penalty of ₹1,000. Although the amount may seem moderate, it is an unnecessary financial burden that can be avoided with timely compliance.
Another area of concern is the interest levied under Section 234A, which applies when the ITR is filed after the due date and tax dues remain unpaid. This interest is calculated monthly and continues until the return is filed, making delays progressively more expensive.
In addition to financial costs, non-compliance delays the processing of tax refunds. A taxpayer who has already overpaid taxes will find that refunds are postponed if returns are filed late, impacting liquidity and personal financial planning.
Beyond the monetary aspect, delayed or missed filings can damage financial credibility. Banks, credit institutions, and even visa authorities often request copies of filed ITRs as proof of income. Non-compliance can therefore create hurdles in securing loans, credit cards, or international travel approvals.
For individuals or businesses that consistently fail to comply, the consequences extend to legal risks. Continuous defaults may invite scrutiny or notices from the tax department, which could lead to detailed assessments and additional penalties. This not only increases financial exposure but also creates reputational risks.
Timely compliance with advance tax payments and ITR deadlines eliminates these complications. It ensures smooth tax administration, strengthens financial credibility, and allows taxpayers to focus on long-term planning without the distraction of penalties, interest, or legal hurdles.
Practical Examples: Advance Tax vs ITR Filing Scenarios
Consider two scenarios:
A salaried individual with additional rental income has a tax liability of ₹1,00,000. They pay the required advance tax installments on time. At the time of filing ITR in September, their liability is fully covered, and no additional payment is required. The process is seamless.
A freelancer with annual earnings skips advance tax installments and decides to pay at year-end. By March, the liability stands at ₹2,00,000. At filing, they not only need to pay the entire sum but also bear interest charges under Sections 234B and 234C for missing deadlines. Even if the ITR is filed on time, the interest cost adds significantly to the tax burden.
These examples highlight how advance tax and ITR deadlines are interconnected. Compliance with both ensures minimal financial strain.
How TaxBuddy Helps Manage Advance Tax and ITR Deadlines
Managing both advance tax and ITR deadlines can feel overwhelming, especially for individuals with multiple income sources. TaxBuddy provides a technology-driven solution to this challenge. The platform uses automation to calculate advance tax liability, remind users of due dates, and adjust payments during ITR filing.
For those who prefer a guided approach, TaxBuddy’s expert-assisted plans ensure that professionals handle calculations, filings, and compliance with accuracy. This reduces the risk of errors, interest charges, and penalties. By simplifying advance tax tracking and filing obligations, TaxBuddy offers taxpayers peace of mind and a hassle-free compliance experience.
Conclusion
Advance tax payments and ITR deadlines are interconnected pillars of India’s tax system. Paying taxes in instalments reduces the burden at year-end, while meeting the return filing deadline ensures proper reconciliation and avoids penalties. With the right planning, taxpayers can meet both requirements smoothly and safeguard themselves from unnecessary costs. For anyone looking for assistance in tax filing, it is highly recommended to download theTaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy provides flexibility for taxpayers by offering both self-filing and expert-assisted plans. With self-filing, individuals can upload documents like Form 16, bank statements, or TDS certificates, and the platform’s AI system auto-fills details, checks for errors, and ensures accuracy. For those with complex income profiles—such as capital gains, F&O trading, crypto, or NRI incomes—expert-assisted plans connect taxpayers with trained professionals who prepare, review, and file returns. This dual model ensures that both simple and complex cases are handled effectively.
Q2. Which is the best site to file ITR?
While the official Income Tax Department portal is always an option, many taxpayers prefer user-friendly platforms that provide additional support and automation. TaxBuddy stands out as one of the best because it integrates AI-driven tax filing, automated error detection, and real-time TDS validation. It not only simplifies self-filing but also offers professional guidance through expert-assisted plans, which makes it suitable for salaried employees, freelancers, and business owners alike.
Q3. Where to file an income tax return?
An income tax return can be filed either directly on the Income Tax Department’s e-filing portal (incometax.gov.in) or through trusted online platforms like TaxBuddy. Filing through TaxBuddy offers the advantage of guided filing, where automated systems check for inconsistencies and professionals assist when required. This helps taxpayers avoid mistakes and penalties while also saving time compared to navigating the official portal independently.
Q4. Who needs to pay advance tax?
Advance tax applies to anyone whose total tax liability in a financial year is ₹10,000 or more after accounting for TDS. This includes salaried individuals with additional income such as rent or capital gains, freelancers, professionals, and businesses. The rule ensures that taxes are collected gradually instead of as a lump sum at year-end, spreading the burden for taxpayers and providing the government with regular revenue inflows.
Q5. What happens if I miss the advance tax payment deadline?
If advance tax is not paid on time or the required percentage is not deposited in each installment, taxpayers are liable to pay interest under Sections 234B and 234C of the Income Tax Act. This interest can significantly increase the total liability at the time of filing returns. Missing advance tax deadlines also results in higher year-end payments, creating financial stress.
Q6. Can I file a belated ITR after the due date?
Yes, taxpayers who miss the original filing deadline can still file a belated return by December 31 of the assessment year. However, this comes with penalties under Section 234F and possible interest under Section 234A. Filing a belated return also delays refunds, if any are due. Moreover, losses under certain heads cannot be carried forward when filing belated returns, which limits future tax-saving opportunities.
Q7. How does advance tax paid affect my final tax calculation?
Advance tax payments are adjusted against the total tax liability when filing the ITR. If advance tax plus TDS equals or exceeds the final liability, no additional tax is due, and any excess is refunded. If the advance tax paid is lower than the liability, the balance must be paid with interest. Timely advance tax payments, therefore, minimise year-end dues and penalties.
Q8. Can I pay advance tax in lump sum?
Yes, taxpayers are allowed to pay advance tax in a lump sum, though it is typically scheduled in installments across the financial year. Under presumptive taxation schemes (Sections 44AD, 44ADA, 44AE), the entire advance tax can be paid by March 15 in one installment. For others, a lump sum payment is permitted, but missing interim installments can still attract interest charges, so paying in phases is advisable.
Q9. What is the penalty for missing the ITR deadline?
The penalty for missing the ITR deadline depends on the taxpayer’s total income. Under Section 234F, if total income exceeds ₹5 lakh, a penalty of ₹5,000 applies. If income is below ₹5 lakh, the penalty is reduced to ₹1,000. Along with the penalty, interest under Section 234A is also charged for unpaid tax dues. Delayed filing also postpones refunds and restricts certain tax benefits.
Q10. Does advance tax apply to freelancers and consultants?
Yes, freelancers and consultants are required to pay advance tax if their annual tax liability after TDS is ₹10,000 or more. Since their income is not usually subject to TDS in the same way as salaried employees, freelancers often need to calculate and pay advance tax on their professional income directly. Missing this obligation can lead to heavy interest charges at year-end.
Q11. How is advance tax adjusted during ITR filing?
At the time of filing the return, advance tax paid is reconciled with the final tax liability. If the advance tax paid plus TDS is greater than the final liability, the taxpayer is eligible for a refund. If it falls short, the balance must be paid immediately, along with applicable interest. This adjustment ensures that the tax department credits the taxpayer for payments made in advance.
Q12. How can TaxBuddy help in advance tax calculation and timely ITR filing?
TaxBuddy simplifies compliance by automating advance tax calculations based on income sources, deductions, and liabilities. The platform sends reminders for instalment dates, helping taxpayers avoid interest charges under Sections 234B and 234C. At the time of ITR filing, TaxBuddy reconciles advance tax payments and TDS with final liability, ensuring accurate reporting. For complex cases, expert-assisted plans ensure professional handling of filings and notice management, giving taxpayers a seamless and secure filing experience.
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