The answer is yes, you may very well pay the advance tax on December 16, 2024, without any penal interest. This flexibility is based on a circular issued in 1994, which has still not been superseded. The circular said if the due date to deposit advance tax falls on a public holiday, then the next working day will be the deadline.
“In cases where the last date for making payment of such instalments (i.e., 15th September, 15th December and 15th March) happens to be a holiday and the assessee pays the due amount of advance tax on the next working day….It is hereby clarified that if the last day for payment of any instalments of advance tax is a day on which the receiving bank is closed, the assessee can make the payment on the next immediately following working day, and in such cases, the mandatory interest leviable under sections 234B and 234C of the Income-tax Act, 1961 would not be charged,” said the Income Tax Department in a circular dated January 14, 1994.
No penalty of penal interest if you pay your advance tax on Dec 16
According to chartered accountant (Dr.) Suresh Surana, in accordance with the said Circular (January 1994), one can deposit the advance tax for the third installment of FY 2024-25 on December 16, 2024 (Monday), since December 15, 2024, falls on a Sunday, without attracting any penalty or interest.
Experts say that per the Circular, the taxpayer can still pay the Advance Tax on 16th December (next working day). “If, however, due to any other reason, even the next day (Monday) is a bank holiday, then the payment must be made on the immediate next working day (i.e., Tuesday – 17th December 2024). The payment made on the immediately following working day will be treated as if it were paid on the due date. This Circular hence promotes a taxpayer-friendly approach by recognizing operational constraints, thereby enhancing compliance without undue hardship. Interestingly, the same Circular is also quoted on the Advance Tax payments Tutorial Page of the Income Tax Website,” says Chartered Accountant Himank Singla, Partner, S B H S & Associates.
Source: Income Tax India on X (formerly Twitter)
What is the due date to deposit advance tax
The table below shows the the timeline for payment of advance tax:
Better to use online platform to make advance tax payment on time
Though you can make payment next day however it is now possible make payment online even on a holiday. “However, it is important to note that this Circular is quite dated, and since online payment facilities are now widely available. Though, this circular has not been superseded, yet practically there may be levy of interest under section 234B and 234C as it is a system driven computation. Taxpayers are encouraged to make payments within the stipulated deadlines or seek clarifications from their assessing officers to avoid any potential issues,” says Surana.
