What if I miss the 15 March advance tax deadline?
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Short answer
You pay interest, but the cost depends on how late you are. For a freelancer on the presumptive scheme in section 58(2) row 1 or row 3, section 425(3) of the Income-tax Act, 2025 charges simple interest of 1% on the shortfall at 15 March.12 Tax paid by 31 March still counts as advance tax under section 408(3), which can keep you clear of the separate 1% a month interest in section 424 that applies when advance tax paid is below 90% of the assessed tax.23
The 15 March advance tax date catches many freelancers: invoices from foreign clients arrive late in the year, and a translator, designer or developer on the presumptive scheme has only this one instalment to remember. For tax year 2026-27 the date is 15 March 2027.2 Missing it is not a disaster, but it costs interest.
Who has only the 15 March date?
Section 408(2) requires an assessee who declares profits under section 58(2), Table row 1 (the old 44AD) or row 3 (the old 44ADA), to pay the whole advance tax on or before 15 March.2 Everyone else pays in four instalments under section 408(1).2
What interest applies to a late 15 March payment?
Two provisions can apply:
- Section 425(3), for presumptive taxpayers. If advance tax paid by 15 March is less than the tax due on returned income, simple interest of 1% is charged on the shortfall.1 This is a one-time 1%, not a monthly rate.
- Section 424, for anyone below 90%. If advance tax paid is less than 90% of the assessed tax, simple interest at 1% for every month or part of a month runs from 1 April after the tax year until the income is determined or assessed.3
"Tax due on returned income" is reduced by any tax deducted at source, so Indian TDS on part of your income lowers the base.1
How does it work in an example?
An IT consultant on row 3 has tax of ₹1,00,000 for tax year 2026-27, with no TDS, and pays the whole amount on 25 March 2027.123
| Interest | Calculation | Amount |
|---|---|---|
| Section 425(3) | 1% of ₹1,00,000 shortfall at 15 March | ₹1,000 |
| Section 424 | Paid by 31 March, so at least 90% paid as advance tax | Nil |
If the consultant instead waited until filing the return in August 2027, section 424 interest would also run from 1 April 2027 on the unpaid amount.3
Can I avoid the interest if my income was new?
Partly. Section 425(4) waives interest under section 425 on a shortfall caused by under-estimating business or professional income "accruing or arising for the first time", if you pay the tax on it in the remaining instalments or by 31 March.1 It does not help an existing freelancer whose foreign billing simply grew.
What should I do now?
If you have missed 15 March, pay before 31 March so the payment counts as advance tax.2 Then file on time; the advance tax guide explains the computation, and the export compliance calendar helps you diary next year's date. A chartered accountant (CA) can confirm the interest figure before you file.
How did we verify this?
We checked this page against the sources below on 28 October 2026. Read our methodology or report an error.
- [1]Income-tax Act, 2025, section 425 (interest for deferment of advance tax) (Income Tax Department section page)
- [2]Income-tax Act, 2025, section 408 (instalments of advance tax) (Income Tax Department section page)
- [3]Income-tax Act, 2025, section 424 (interest for defaults in payment of advance tax) (Income Tax Department section page)
Frequently asked questions
Is the 15 March interest charged per month?+
No. Section 425 charges a flat 1% of the shortfall for the 15 March instalment. Section 424 is the provision that runs at 1% for every month or part of a month.13
Does paying on 31 March help?+
Yes. Section 408(3) treats amounts paid by 31 March as advance tax for that financial year, which counts towards the 90% test in section 424.23
What if I pay nothing until I file my return in August?+
Section 424 interest runs at 1% a month or part of a month from 1 April after the tax year on the shortfall, in addition to section 425 interest.13
I am not on the presumptive scheme. Is my March interest the same?+
For the 15 March instalment the rate in the section 425 Table is also 1%, but you may owe 3% on earlier shortfalls at 15 June, 15 September and 15 December.1
This page is general information for Indian service exporters, not tax or legal advice. Rules change and outcomes depend on your facts, so confirm with a chartered accountant before acting.
Keep reading
When and how much advance tax does an Indian freelancer pay?
Advance tax for Indian freelancers under the Income-tax Act, 2025: the ₹10,000 test, four instalments, the single 15 March rule for presumptive tax, and interest.
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How presumptive tax for professionals works for Indian freelancers paid in foreign currency: old 44ADA, new section 58, limits, 50% income, advance tax.
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