Section 425 - Interest for deferment of advance tax

Advance tax deferment interest applies to shortfalls in instalments, with exceptions for specified minimum payments and income categories.

Interest for deferment of advance tax is payable where an assessee fails to pay advance tax, or pays less than the advance tax due on returned income by the prescribed instalment dates. The section sets out staged instalments with specified interest rates, provides exceptions where minimum percentages are paid by the relevant dates, and applies a separate 1% interest rule for certain assessees on 15 March. No interest is chargeable for shortfalls arising from underestimation of specified income if the tax on that income is paid by the remaining instalments or by 31 March.