Advance tax 2026-27: due dates, who must pay, and interest for shortfalls
Advance tax for tax year 2026-27: the 15 June, September, December and March instalments, the ₹10,000 threshold and 1% monthly interest on shortfalls.
You must pay advance tax for tax year 2026-27 if the tax you expect to owe for the year, after subtracting TDS and TCS, is ₹10,000 or more (section 404 of the Income-tax Act, 2025). It is paid in four instalments: at least 15% by 15 June 2026, 45% by 15 September 2026, 75% by 15 December 2026 and 100% by 15 March 2027 (section 408). Taxpayers using presumptive business or professional income can pay everything by 15 March. Paying late or too little costs interest of 1% a month on the shortfall. Salaried people whose only income is salary are usually covered by employer TDS, but interest, rent, capital gains and freelance income often push them over the limit.
Instalment schedule for tax year 2026-27
| Due date | Cumulative minimum paid | If your estimated tax after TDS is ₹1,00,000 |
|---|---|---|
| 15 June 2026 | 15% | ₹15,000 |
| 15 September 2026 | 45% | ₹45,000 (₹30,000 more) |
| 15 December 2026 | 75% | ₹75,000 (₹30,000 more) |
| 15 March 2027 | 100% | ₹1,00,000 (₹25,000 more) |
Any advance tax paid on or before 31 March still counts as advance tax for the tax year ending that day, but interest for missing the 15 March instalment may still apply.
Presumptive income. If you declare business or professional income on a presumptive basis (the scheme in section 58, formerly 44AD and 44ADA), you can pay the whole advance tax in one instalment by 15 March.
Senior citizens. Resident individuals aged 60 or more at any time during the tax year who have no business or professional income do not have to pay advance tax (section 403(3) of the 2025 Act, carried over from the 1961 Act). They can settle the full amount as self-assessment tax before filing.
Who typically needs to pay
- Freelancers and consultants whose clients deduct only 10% TDS but whose slab rate is higher.
- Salaried people with large interest or rent income, or with gains from selling shares, funds or property.
- Pensioners below 60 with large deposit interest.
- Anyone with income from abroad that has no Indian TDS.
- Traders in F&O or intraday shares, whose income is business income.
If your employer deducts TDS on salary, you can also give the employer details of other income so that more TDS is deducted. That can be simpler than paying instalments yourself.
How to estimate the amount
- Estimate total income for the tax year, under the regime you will choose.
- Work out tax, including special-rate capital gains and cess. The new regime calculator helps with slab income.
- Subtract expected TDS and TCS.
- If the result is ₹10,000 or more, pay according to the schedule.
- Revise the estimate before each due date. Capital gains or a bonus during the year change the figure.
Illustrative example. A consultant expects ₹20 lakh of professional fees with 10% TDS (₹2,00,000) and ₹4 lakh of expenses, so total income is ₹16 lakh. New regime tax on ₹16 lakh is ₹1,20,000, or ₹1,24,800 with cess. TDS of ₹2,00,000 already exceeds this, so no advance tax is due and a refund will follow. If the clients had not deducted TDS, the consultant would owe ₹1,24,800 in advance tax: ₹18,720 by 15 June, a cumulative ₹56,160 by 15 September, ₹93,600 by 15 December and the full amount by 15 March.
Interest when you pay late or too little
The 2025 Act keeps the two interest charges individuals know from the 1961 Act:
| Interest | Section (2025 Act) | When it applies | Rate |
|---|---|---|---|
| For deferring instalments | 425 (formerly 234C) | An instalment is short of the required percentage | 1% a month on the shortfall, normally for 3 months per instalment and 1 month for the March instalment |
| For default in advance tax | 424 (formerly 234B) | Advance tax paid by 31 March is less than 90% of the tax assessed | 1% a month from 1 April until you pay |
| For late return | 423 (formerly 234A) | Return filed after the due date with tax unpaid | 1% a month on unpaid tax |
Illustrative example. You should have paid ₹45,000 by 15 September but paid only ₹15,000. Shortfall ₹30,000 × 1% × 3 months = ₹900 interest for that instalment. If by 31 March you have paid only ₹60,000 of a final liability of ₹1,00,000 (less than 90%), interest for default runs at 1% a month on the ₹40,000 balance until you pay it, so ₹400 for each month or part of a month.
Gains that arise suddenly, such as capital gains or lottery winnings, can be covered in the instalments after they arise without interest for deferment on earlier instalments, provided you pay in the remaining instalments.
How to pay
Use the e-Pay Tax service on the income tax e-filing portal. It covers both the 1961 Act (up to FY 2025-26) and the 2025 Act (from tax year 2026-27). Choose:
- the correct Act and tax year 2026-27;
- the type of payment: advance tax;
- net banking, debit card, UPI or another available mode.
Keep the challan details. They appear in Form 26AS and the AIS within a few days, and you enter them in your return. Paying under the wrong year or wrong type is a common error. It can be corrected but takes time; see the common mistakes guide.
Related: TDS and TCS basics, capital gains rates and the tax year 2026-27 overview.
Frequently asked questions
I am salaried with ₹40,000 of FD interest. Do I need to pay advance tax?
Only if the tax on that interest, after the bank's TDS, plus any other shortfall, is ₹10,000 or more. Under the new regime, if your total income stays within ₹12 lakh, there may be no tax at all.
What if I overpay advance tax?
You get a refund with interest after processing of your return.
Can I pay all advance tax on 15 March?
You can, but you will owe interest for deferring the June, September and December instalments, unless you use presumptive taxation.
Sources
- Income Tax Department: sections 404, 408 and 423–425 of the Income-tax Act, 2025
- Income Tax e-filing portal: e-Pay Tax, challan status and Form 26AS
