Technical issues on integrated I-T portal leave corporates in compliance limbo amid missed advance tax deadline

A technical malfunction on the Income Tax department’s portal on 15 September 2025 prevented several companies from completing advance tax payments before the statutory deadline. The portal faced heavy usage as it was both the final date for filing income tax returns for assessment year 2024–25 and the deadline for the second instalment of advance tax. Companies unable to finalise payments now face mandatory interest charges, exposing them to financial penalties running into crores.

Tax advisors and legal counsels have approached the Central Board of Direct Taxes (CBDT) and the Ministry of Finance to request a waiver for interest on payments initiated before the deadline but not processed due to the glitch. Some companies are considering filing writ petitions if relief is not granted. Under existing rules, a delay of even one day in quarterly advance tax payments results in a 3% interest charge, significantly increasing liabilities for large taxpayers.

The integration of tax filing and payment portals means any technical issues now affect both processes. Many taxpayers reported being unable to log in or complete advance tax payments despite trying to comply within the deadline. While the CBDT extended the ITR filing due date by one day, the advance tax deadline remained unchanged. Due to portal glitches, several taxpayers could not pay on time and face a 3% interest penalty through no fault of their own. Experts suggest the CBDT should consider waiving this interest for payments made on September 16.

The advance tax schedule has four key deadlines: 15% of your estimated tax by June 15, 45% cumulatively by September 15, 75% by December 15, and 100% by March 15. For instance, if your annual tax liability is Rs 2 lakh, you should have paid Rs 30,000 by June. By now, the cumulative payment should be Rs 90,000, meaning an additional Rs 60,000 is due. Shortfalls attract interest: under Section 234C, missing the 45% mark by September 15 incurs 1% per month on the unpaid amount for three months. If the total tax paid by March 31 is less than 90%, Section 234B adds another 1% per month until full payment at filing.

Missing advance tax deadlines

For large corporations, quarterly penalties may reach into crores of rupees due to the 3% interest levied on delayed advance tax. Tax practitioners note that the rules leave little room for discretion, penalising companies even when delays result from system failures rather than intentional non-compliance. Immediate consequences include higher interest costs and the risk of further compliance complications for affected taxpayers.

Industry experts point to previous instances where the CBDT has provided relief in similar circumstances. The CBDT’s Circular 5/2025, for example, allowed waivers on late TDS/TCS payments caused by technical problems. Ashish Karundia, founder of the CA firm Ashish Karundia & Co, stated: "Many taxpayers had a harrowing time. It is only fair that they are not burdened with charges due to factors beyond their control -- irrespective of whether their payment was incomplete or they were unable to login.

The CBDT’s Circular 5/2025, which gave relief for payments of TDS/TCS (tax deducted and collected at source) affected by similar issues, sets a precedent. Courts too have recognised such challenges and granted relief in non-compliances such as delay in return filings or document uploads caused by technical glitches. Taxpayers’ intent to comply was evident as many transactions were reversed. A clarification from authorities would instil confidence in the system."

Professional associations and legal experts have submitted representations to the CBDT, arguing that taxpayers should not be penalised for circumstances outside their control when intent and attempts to comply are evident. The precedent set by both administrative relief and court rulings in earlier technical failures is being referenced to support demands for waivers. Some advisors have indicated plans to approach the courts if authorities do not issue clarifications, highlighting ongoing uncertainty and the need for resilient digital infrastructure in government compliance systems.