After ₹50 lakh capital gains on gold in FY 2025-26, what will be the advance tax and penalty?

The due date to pay the final instalment of advance tax for FY 2025-26 is March 15, 2026. If your total tax liability from any source other than salary is above ₹10,000, you need to pay the advance tax to avoid a penalty.

For salary income, employers deduct tax in advance and pay it to the Income-tax Department on behalf of their employees.

The additional income on which you need to pay advance tax includes capital gains, rent, etc.

This article explains the advance tax rules applicable to capital gains, using the example of a person who has booked ₹50 lakh in capital gains from gold during FY 2025-26. He sold the gold in December 2025.

What the rules say

Income from the sale of gold, property, shares, and mutual funds is termed capital gain, and it is taxed at specified rates based on the holding period, either short-term or long-term.

In case of long-term capital gains on sale of equity shares or units of equity-oriented mutual fund, there is an exemption of up to ₹1,25,000.

If you have realised capital gains in FY 2025-26, you must calculate your tax liability now. If your liability is above ₹10,000, then you should clear 100% of your liability by paying advance tax on or before March 15. This also applies to salaried employees having income from sources not reported to their employers.

The advance tax payment is required to be done as per the following schedule:

For example, let’s calculate the advance tax on long-term capital gain of ₹50 lakh from the sale of gold in FY 2025-26:

What happens when you fail to pay advance tax

Non-payment of advance tax by the due date can result in interest implications under sections 234B and 234C of the Income-Tax Act, 1961.

As per Section 234B, you are required to pay at least 90% of the total taxes as advance tax or TDS/TCS by March 31, failing which 1% interest applies on the unpaid tax. The 1% tax will be calculated from April 1, 2026 till the date you actually pay the tax.

A per Section 234C, 1% tax applies to the non-payment or under-payment of each advance tax installment.

If you sold your gold before December 15, then you were required to pay 75% or ₹487,500 advance tax by December 15. If you missed it, then you would incur 1% tax per month for 3 months on this ₹487,500 shortfall.

However, if you booked the gains after December 15, you need to pay the full advance tax by March 15. You don’t owe anything for December. If you fail to clear the minimum 90% of your tax liability by March 31, then a separate 1% per month from April 1 till the date of actual payment will be charged.

As per the advance tax schedule, you are required to pay 15% of your estimated annual tax liability by June 15, 45% by September 15, 75% by December 15, and 100% by March 15. So if you sold gold at higher prices in FY 2025-26 and realised capital gains that can lead to a tax liability of over ₹10,000, you must pay advance tax by March 15 to avoid the penalty discussed above.