Advance tax is the amount of tax you pay in installments during the financial year, rather than paying the entire tax liability at the time of filing your Income Tax Return. It follows the principle of "pay as you earn" and helps spread your tax burden across the year.
With the implementation of the Income Tax Act, 2025 from April 1, 2026, the advance tax framework has been carried forward with updated section numbers. This guide covers the advance tax installment due dates for FY 2026-27 (Tax Year 2026-27), who must pay, exemptions, special rules for presumptive taxpayers, and the interest consequences of missing deadlines.
Advance Tax Installment Due Dates for FY 2026-27
For the financial year 2026-27 (Tax Year 2026-27), advance tax must be paid in four installments. The due dates and cumulative payment percentages are as follows:
| Due date | Cumulative advance tax payable |
|---|---|
| On or before June 15, 2026 | At least 15% |
| On or before September 15, 2026 | At least 45% |
| On or before December 15, 2026 | At least 75% |
| On or before March 15, 2027 | 100% |
These dates and percentages are in Section 408 of the Income Tax Act, 2025 (formerly Section 211 of the 1961 Act). Any amount paid by March 31, 2027 is also treated as advance tax for the year.
Verify current due dates on incometaxindia.gov.in as CBDT may issue extensions.
Understanding the Cumulative Payment Rule
The percentages mentioned above are cumulative. This means:
- By June 15, you must have paid at least 15% of your estimated total tax liability for the year.
- By September 15, the total paid (including the first installment) must be at least 45%.
- By December 15, the total paid must be at least 75%.
- By March 15, you must have paid 100% of your estimated tax liability.
Example: If your estimated tax liability for FY 2026-27 is Rs. 1,00,000, you must pay:
| Due date | Cumulative total | Pay in this installment |
|---|---|---|
| June 15, 2026 | Rs. 15,000 | Rs. 15,000 |
| September 15, 2026 | Rs. 45,000 | Rs. 30,000 |
| December 15, 2026 | Rs. 75,000 | Rs. 30,000 |
| March 15, 2027 | Rs. 1,00,000 | Rs. 25,000 |
Who Must Pay Advance Tax?
You are required to pay advance tax if your estimated net tax liability for the financial year is Rs. 10,000 or more. Net tax liability means the total tax payable after deducting TDS (Tax Deducted at Source) and TCS (Tax Collected at Source).
Applicability
The Rs. 10,000 threshold (Section 404 of the 2025 Act, formerly Section 208) applies to every assessee: salaried individuals with other income such as rent, interest or capital gains, freelancers and professionals, businesses, firms, LLPs and companies.
Who is Exempt from Advance Tax?
1. Resident senior citizens (aged 60 years or above)
Resident senior citizens aged 60 years or above are exempt from paying advance tax if they do not have any income under the head "Profits and Gains of Business or Profession."
This means a senior citizen with only pension, interest income, rental income, or capital gains is not required to pay advance tax. They can pay their entire tax liability at the time of filing their ITR.
2. Taxpayers with tax liability after TDS below Rs. 10,000
If your net tax liability (after considering TDS) is less than Rs. 10,000, you are not required to pay advance tax.
Special Rule for Presumptive Taxation Taxpayers
Taxpayers who have opted for the presumptive taxation scheme under Section 44AD (for businesses) or Section 44ADA (for professionals) have a simpler advance tax requirement. Under the 2025 Act these schemes sit in Section 58(2) (Table Sl. No. 1 and 3), and Section 408(2) lets them pay in one installment. Goods carriage operators (old Section 44AE) are not covered by this relief.
Key point: Taxpayers under presumptive taxation are not required to pay advance tax in four installments. They can pay the entire 100% of their advance tax liability in a single installment on or before March 15, 2027.
Interest for Default in Advance Tax Payment
Under the Income Tax Act, 2025, failure to pay advance tax on time or paying less than the required amount attracts interest. The relevant sections are Section 424 (formerly Section 234B) and Section 425 (formerly Section 234C). For advance tax of FY 2025-26 and earlier years, Sections 234B and 234C of the 1961 Act continue to apply.
Section 424 (Interest for Default in Payment of Advance Tax)
Interest under Section 424 applies if the advance tax paid is less than 90% of the assessed tax liability. Interest is charged at 1% per month (or part of a month) from April 1 following the end of the tax year to the date of payment of the shortfall.
Section 425 (Interest for Deferment of Advance Tax Installments)
Interest under Section 425 applies if an installment is not paid by its due date or if the amount paid is less than the required percentage.
The interest is calculated as follows:
| Installment | Shortfall measured against | Interest |
|---|---|---|
| June 15 | 15% of tax due on returned income | 3% of shortfall (1% for 3 months) |
| September 15 | 45% | 3% of shortfall |
| December 15 | 75% | 3% of shortfall |
| March 15 | 100% | 1% of shortfall |
No interest arises on the first two installments if you paid at least 12% by June 15 and 36% by September 15. Presumptive taxpayers under Section 58(2) pay 1% only on any shortfall at March 15.
How to Pay Advance Tax Online
Log in to the income tax e-filing portal and open e-Pay Tax. Choose the assessment year, select Income-tax (other than companies) or Corporation Tax for companies, and choose Advance Tax (100) as the type of payment. Pay by net banking, debit card, UPI or other listed modes and download the challan receipt, since the BSR code and challan serial number are needed in your return.
Common Mistakes to Avoid
1. Forgetting to include all sources of income
Many taxpayers calculate advance tax based only on salary or business income, forgetting interest income, capital gains, rental income, or other sources. This leads to underpayment and interest liability.
2. Not adjusting for TDS
Remember to deduct TDS already deducted from your income when calculating your advance tax liability. Only the net tax payable (after TDS) needs to be paid as advance tax.
3. Missing the June 15 deadline
The first installment is often overlooked. Even if you are unsure of your exact income, pay at least 15% of the estimated tax by June 15 to avoid interest.
4. Not revising estimates during the year
If your income changes during the year (for example, due to a bonus, capital gains, or additional business income), revise your advance tax estimate and top up the subsequent installments accordingly.
5. Senior citizens assuming automatic exemption
Senior citizens are exempt only if they have no business or professional income. If a senior citizen has business income, advance tax is still applicable.
Key Points to Remember
-
Advance tax is required if net tax liability is Rs. 10,000 or more.
-
Four installments: June 15 (15%), September 15 (45%), December 15 (75%), March 15 (100%).
-
Resident senior citizens (60+) without business income are exempt.
-
Presumptive taxpayers (Sections 44AD/44ADA) can pay 100% by March 15 in a single installment.
-
Interest under Sections 424 and 425 (1% per month, formerly 234B and 234C) applies for defaults or deferments.
-
Re-evaluate your tax liability before each installment to avoid shortfalls.
-
Always download the payment challan after making the payment for your records.
Where Tax Garden Helps
Calculating advance tax correctly and tracking installment due dates requires careful planning. A single missed installment or underestimation can lead to interest liability under Sections 424 and 425.
Tax Garden's tax experts help you:
- Calculate your estimated tax liability accurately for the year
- Determine the correct advance tax amount for each installment
- Plan for TDS and other tax credits to reduce advance tax liability
- Ensure timely payment of all four installments
- Revise estimates if your income changes during the year
- Respond to any notices or intimations from the department
Sources: Income Tax Act, 2025, Sections 424 and 425; Income Tax Act, 1961, Sections 44AD, 44ADA, 207, 208, 209, 234B, 234C; Income Tax Department e-Filing portal (incometaxindia.gov.in); CBDT notifications on advance tax due dates. Verify current due dates, interest rates, and procedures on incometaxindia.gov.in before acting, as rules may be updated periodically. This article is general information on advance tax installment due dates and not a substitute for advice on your specific situation.
Frequently Asked Questions
How much advance tax is due in each instalment if my estimated tax is Rs 1,00,000?
The instalments are cumulative. You pay Rs 15,000 by June 15, 2026, a further Rs 30,000 by September 15 so the total reaches Rs 45,000, another Rs 30,000 by December 15 for a total of Rs 75,000, and the final Rs 25,000 by March 15, 2027. Reduce each figure by TDS and TCS credited to you before computing what to deposit.
Is a retired senior citizen with rental income and capital gains required to pay advance tax?
No, if they are resident, aged 60 or above at any time during the year, and have no income from business or profession. Pension, interest, rent and capital gains do not trigger advance tax for such a person, and the full tax can be paid as self-assessment tax before filing the return. The exemption is lost if the senior citizen has any business or professional income.
Did the Income-tax Act, 2025 change the advance tax due dates for Tax Year 2026-27?
No. The new Act, which applies to income earned from 1 April 2026, keeps the same four due dates of June 15, September 15, December 15 and March 15 with the same 15%, 45%, 75% and 100% cumulative targets. The Rs 10,000 threshold and the single March 15 instalment for presumptive taxpayers also continue. What changes are the section numbers quoted in forms and notices.
Should I revise my advance tax if I receive a bonus or sell property mid-year?
Yes. Advance tax is based on your estimate of the whole year's income, so any bonus not covered by TDS, a property sale or a large freelance invoice should be added to the estimate and the shortfall paid in the next instalment. For capital gains, interest for earlier instalments is not charged if the tax on the gain is paid in the instalments falling after the sale.
What interest applies if my advance tax falls below 90% of the final tax?
If advance tax paid by March 31 is less than 90% of the assessed tax, simple interest of 1% per month or part of a month is charged on the shortfall from April 1 of the following year until you pay it. This is in addition to interest of 1% per month for each instalment that was short or late. Both are computed automatically when you file your return.
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