Income-tax Act, 2025

Interest for deferment of advance tax - Section 425

Interest for deferment of advance tax.

425. (1) Where in any tax year, an assessee, liable to pay advance tax under section 404, other than the assessee mentioned in sub-section (3), has failed to pay such tax, or the advance tax paid by the assessee on its current income on or before the date specified in column B of the Table below, is less than advance tax due on returned income, as specified in column C, then the assessee shall be liable to pay interest on the amount of shortfall of advance tax as specified in column D, at the rate of interest specified in column E:

TABLE

Sl. No.Due date of InstalmentAdvance tax due on returned incomeAmount of Shortfall of advance tax being advance tax due as per column C, as reduced by advance tax already paid on or before the date specified in column BInterest payable on shortfall as specified in column D

ABCDE

1.15th day of June15% of the tax due on returned income.Shortfall till 15th day of June3%

2.15th day of September.45% of the tax due on returned income.Shortfall till 15th day of September3%

3.15th day of December.75% of the tax due on returned income.Shortfall till 15th day of December3%

4.15th day of March.100% of the tax due on returned income.Shortfall till 15th day of March1%.

(2) The assessee shall not be liable to pay any interest under sub-section (1), if the advance tax paid by the assessee on the current income,

(a) on or before the 15th day of June is 12% or more of the tax due on the returned income;

(b) on or before the 15th day of September is 36% or more of the tax due on the returned income.

(3) An assessee who declares profits and gains as per section 58(2) (Table: Sl. No. 1 or 3) or, who is liable to pay advance tax under section 404, has failed to pay such tax, or the advance tax paid by the assessee on its current income on or before the 15th day of March is less than the tax due on returned in .... To read the full section download the app from Google Play store