Advance Tax Due Dates: Who Pays, When, and the Cost of Missing It

You must pay advance tax if your tax for the year, after TDS and TCS, is Rs 10,000 or more. For FY 2026-27 it is due in four instalments: 15% by 15 June 2026, 45% by 15 September 2026, 75% by 15 December 2026 and 100% by 15 March 2027. Paying late costs interest of 1% a month.

What is advance tax, and why does it exist?

Advance tax is income tax paid during the year in which you earn the income, not after it ends. A salaried person already does this through TDS, the tax an employer deducts every month. If you run a business, freelance, earn rent or make capital gains, nobody deducts enough tax for you. Advance tax puts you on the same pay-as-you-earn footing. The government gets a steady flow, and you avoid one large bill in July.

Do you have to pay it?

Estimate your total income for the year. Work out the tax on it. Subtract the TDS and TCS already deducted or collected, including the TDS your marketplace deducts on your sales. If the balance is Rs 10,000 or more, you must pay advance tax. Under the Income-tax Act, 2025 this threshold is in section 404. It is the same Rs 10,000 that applied under the old Act.

Who does not have to pay?

• Anyone whose net tax for the year is below Rs 10,000.
• A resident individual aged 60 or more who has no income from business or profession.

Presumptive taxpayers are not exempt, but they get a simpler rule. Presumptive taxation lets a small business or professional declare income as a fixed percentage of receipts without keeping detailed books. If you are on the presumptive scheme for business or for a profession (section 58 of the 2025 Act, the old sections 44AD and 44ADA), you can pay your whole advance tax in a single instalment by 15 March. The department's FAQ says goods carriage operators on the presumptive scheme still follow the four instalments.

The four dates for FY 2026-27

From 1 April 2026 the law calls the financial year the "tax year". So FY 2026-27 is tax year 2026-27, and its advance tax falls under the new Act.

The percentages are cumulative. By 15 December you should have paid 75% in total, not 75% on that day.

What does it cost if you miss a date?

There are two separate interest charges. Both are simple interest at 1% for a month or part of a month.

There is a small cushion. Under the long-standing rule, you are not charged deferment interest if you paid at least 12% by 15 June and at least 36% by 15 September. An honest estimate that falls slightly short is forgiven.

For shortfalls relating to FY 2025-26, the old sections 234B and 234C still apply.

What if income arrives suddenly mid-year?

You cannot predict a capital gain, which is the profit on selling shares, mutual funds or property. The law accepts that. If an instalment fell short only because of a capital gain you could not have foreseen, you are not charged deferment interest on that part, provided you pay the tax on it in the remaining instalments or by 31 March. So recalculate as soon as the gain happens.

How to pay advance tax online

1. Go to incometax.gov.in and open e-Pay Tax. You can log in, or use the e-Pay Tax link on the home page with your PAN and a mobile OTP.
2. Click New Payment and choose the income tax tile that applies to you.
3. Select tax year 2026-27. For the type of payment, select Advance Tax (100).
4. Enter the tax amount. Add cess in its box if the form asks for a break-up.
5. Choose how to pay: net banking, debit card, payment gateway including UPI, or over the counter at a bank.
6. Pay and download the challan receipt. It carries the challan number and date you will need in your return.
7. After a few days, check that the payment appears in your Form 26AS or AIS.

The most costly slip here is picking the wrong year. Income earned from April 2026 to March 2027 goes under tax year 2026-27.

Worked example 1: a freelancer

Meera is a freelance designer who keeps regular books, so she is not on the presumptive scheme. Her estimated tax for FY 2026-27, after client TDS, is Rs 80,000.

• By 15 June 2026: Rs 12,000 (15%).
• By 15 September 2026: Rs 24,000 more, total Rs 36,000 (45%).
• By 15 December 2026: Rs 24,000 more, total Rs 60,000 (75%).
• By 15 March 2027: the last Rs 20,000.

What if she pays nothing until 15 March and then pays all Rs 80,000? Deferment interest is 3% of Rs 12,000 (Rs 360), 3% of Rs 36,000 (Rs 1,080) and 3% of Rs 60,000 (Rs 1,800). That is Rs 3,240 for no gain. Had she chosen the presumptive scheme for professionals, one payment by 15 March would have been enough.

Worked example 2: an online seller with a capital gain

Arjun sells home decor on Amazon and keeps regular books. In April he estimates his tax for the year, after marketplace TDS, at Rs 60,000. He pays Rs 9,000 by 15 June and Rs 18,000 more by 15 September, a total of Rs 27,000, which is 45%.

On 10 October 2026 he sells some shares. The tax on that capital gain is Rs 50,000. His tax for the year is now Rs 1,10,000.

• By 15 December 2026 he needs 75% of Rs 1,10,000, which is Rs 82,500. He has paid Rs 27,000, so he pays Rs 55,500.
• By 15 March 2027 he pays the remaining Rs 27,500.

He is not charged interest for the June and September instalments on the capital gain, because the gain did not exist then and he caught up in the next instalment.

The mistake people usually make

They estimate once in April and never look again. A seller's festive season sales in October and November can double the year's profit. If your December payment is still based on the April estimate, you fall short of 75% and the 3% charge applies to the gap. Re-estimate before each due date using actual sales to date. The other common slip is forgetting that TDS reduces the amount. Check Form 26AS first, so you do not pay twice.

Should you work this out yourself?

If your income is steady, a simple sheet with four dates is enough. Get a professional to compute it when your income swings sharply through the year, when you have capital gains, or when you are unsure whether presumptive taxation suits you. The fee is usually smaller than the interest on a bad estimate.

Frequently asked questions

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