Advance tax for FY 2026-27: who must pay, due dates, calculation and interest
Short answer. You must pay advance tax if your income tax for the year, after subtracting TDS and TCS, is ₹10,000 or more. That covers salaried people with interest, rent or capital gains as much as freelancers and investors. Pay 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March. Presumptive taxpayers pay the whole amount by 15 March. Each missed date costs interest at 1% a month. Resident senior citizens with no business income are exempt.
What is advance tax, and who pays it?
Advance tax is income tax paid in instalments during the year in which the income is earned, instead of in one sum when the return is filed. Every taxpayer — salaried, self-employed, investor or non-resident — must pay it when the estimated tax for the tax year, reduced by TDS and TCS, is ₹10,000 or more.
For income earned from 1 April 2026 the rules sit in sections 403 to 408 of the Income-tax Act, 2025 (formerly s.207 to 211), and the interest for missing them in sections 424 and 425 (formerly s.234B and 234C). The numbers changed; the dates, percentages and interest rates did not.
| Your situation | Advance tax? |
|---|---|
| Salary only, and your employer deducts the right TDS | No. TDS already covers it |
| Salary plus FD interest, rent, dividends or capital gains | Yes, if the tax not covered by TDS is ₹10,000 or more |
| Freelancer, professional or business owner with regular books | Yes, in four instalments |
| Presumptive scheme under Section 58 (formerly s.44AD and 44ADA) | Yes, in one instalment by 15 March |
| Resident aged 60 or more with no business or professional income | No. Pay any balance as self-assessment tax before filing |
| Non-resident with Indian rent, interest or capital gains | Yes, if the balance after TDS is ₹10,000 or more. TDS on payments to non-residents is high, so it often covers the tax |
Is advance tax applicable for salaried persons?
Yes, whenever TDS falls short of your total tax by ₹10,000 or more. Your employer deducts tax on salary alone, so the gap comes from everything else. The usual causes are:
- Interest. Banks deduct 10%. If you are in the 30% slab, two-thirds of the tax on that interest is still unpaid.
- Capital gains. No TDS is deducted when a resident sells shares or mutual fund units.
- Rent and dividends, where TDS is nil or well below your slab rate.
- Two employers in one year. Each applies the standard deduction and the lower slabs, so both under-deduct.
- RSU or ESPP shares sold after vesting. See our RSU and ESOP guide.
You have two ways to close the gap. Pay advance tax yourself on the four dates. Or report the other income to your employer in Form 122 (earlier Form 12BAA), so that more TDS comes out of your salary and no advance tax is left to pay. The second route is simpler for steady income such as interest and rent; it does not work well for capital gains you cannot predict.
What are the advance tax due dates for FY 2026-27?
There are four dates: 15 June, 15 September, 15 December and 15 March. By each date your total payments so far must reach a fixed share of the year's advance tax (Section 408).
| Pay on or before | Share due (cumulative) | Interest-free if paid |
|---|---|---|
| 15 June 2026 | 15% | 12% |
| 15 September 2026 | 45% | 36% |
| 15 December 2026 | 75% | 75% |
| 15 March 2027 | 100% | 100% |
| Presumptive taxpayers (Section 58): 15 March 2027 | 100% | 100% |
Anything paid up to 31 March 2027 still counts as advance tax for the year. If you are reading this after 15 September 2026 and have paid nothing, the interest on the first two dates is already fixed. Paying the catch-up amount now stops the December and March interest from being added.
How do I calculate advance tax? A salaried example
Estimate the tax on the whole year's income, subtract the TDS and TCS you expect, and apply the instalment percentages to the balance.
- Estimate the year's income under each head: salary, house property, capital gains, business or profession, other sources.
- Compute the tax under the regime you will use, with 4% cess and any surcharge. Our tax-regime calculator does this for both regimes.
- Subtract the TDS and TCS you expect for the year: salary TDS, bank TDS, TCS on foreign remittances.
- If the balance is ₹10,000 or more, apply 15%, 45%, 75% and 100%.
- Re-estimate before each date. The law asks for a reasonable estimate, not a perfect one.
Worked example. A salaried person in the new regime earns ₹18,00,000. The employer deducts the full tax on salary. She also earns ₹3,00,000 of FD interest, on which banks deduct ₹30,000, and books a short-term gain of ₹2,00,000 on listed shares in October 2026.
| Step | Working | Amount |
|---|---|---|
| Tax on salary alone | Slab tax on ₹17,25,000 | ₹1,45,000 |
| Tax on salary plus interest | Slab tax on ₹20,25,000 | ₹2,06,250 |
| Extra tax caused by the interest, with 4% cess | ₹61,250 × 1.04 | ₹63,700 |
| Less TDS by banks | 10% × ₹3,00,000 | −₹30,000 |
| Tax on the short-term gain, with cess | ₹2,00,000 × 20% × 1.04 | ₹41,600 |
| Advance tax for the year | ₹33,700 + ₹41,600 | ₹75,300 |
The interest income was known from April, so its ₹33,700 follows the normal schedule: ₹5,055 by 15 June and ₹15,165 in total by 15 September. The gain arose in October, so its tax joins from the next date: ₹56,475 in total by 15 December (75% of ₹75,300) and ₹75,300 by 15 March.
Is advance tax applicable on capital gains, and when do I pay it?
Yes. Capital gains count in full towards advance tax, but the law accepts that nobody can forecast them. If an instalment falls short only because of a capital gain, a dividend, a lottery-type winning or income from a newly started business, no deferment interest is charged, provided you pay the tax on that income in the instalments that remain, or by 31 March if none remains (Section 425).
- Gain on 20 August: include it from the 15 September instalment.
- Gain on 20 December: pay its tax by 15 March.
- Gain on 20 March: pay its tax by 31 March.
Work out the tax on the gain first. Long-term gains on listed shares and equity funds are taxed at 12.5% only above ₹1.25 lakh a year, and short-term gains at 20%; the capital gains calculator gives the figure. On a property sale of ₹50 lakh or more the buyer deducts 1% TDS; subtract it before you pay.
Do senior citizens have to pay advance tax on capital gains?
No. A resident individual who is 60 or older at any time during the year, and has no income from business or profession, is outside advance tax altogether (Section 403). Tax on capital gains, interest or rent is paid as self-assessment tax before the return is filed, without interest for deferment. A senior citizen who runs a business or practises a profession, or who is non-resident, pays advance tax like anyone else.
How does advance tax work for freelancers and presumptive taxpayers?
A person who declares income under the presumptive scheme of Section 58 pays the full advance tax in one instalment by 15 March. A shortfall on that date costs 1% for one month. Freelancers and business owners who keep regular books and claim actual expenses follow the four-date schedule.
Remember that Indian clients deduct 10% TDS on professional fees. For many freelancers with only Indian clients that TDS exceeds the final tax, and nothing is left to pay in advance. Freelancers paid from abroad receive their fees without TDS, so the whole tax is due by 15 March. Our guide to income tax for freelancers has the numbers at three income levels.
What is interest under sections 234B and 234C, now sections 424 and 425?
They are the two interest charges for paying advance tax late or not at all. Both run at 1% a month, simple interest, and a part of a month counts as a full month.
| Section 425 (formerly s.234C) | Section 424 (formerly s.234B) | |
|---|---|---|
| Charged when | An instalment is below the required share. The first two dates are forgiven if you paid at least 12% and 36% | Advance tax paid by 31 March is less than 90% of the final tax |
| Period | 3 months for each of the first three dates; 1 month for 15 March | From 1 April after the tax year until the day you pay |
| Charged on | The shortfall on each date | The unpaid tax |
What missing everything costs. Suppose the person in our example pays nothing during the year and clears ₹75,300 on 31 July 2027 while filing her return.
| Charge | Working | Interest |
|---|---|---|
| 15 June shortfall | ₹5,055 × 1% × 3 | ₹152 |
| 15 September shortfall | ₹15,165 × 1% × 3 | ₹455 |
| 15 December shortfall | ₹56,475 × 1% × 3 | ₹1,694 |
| 15 March shortfall | ₹75,300 × 1% × 1 | ₹753 |
| Section 424, April to July | ₹75,300 × 1% × 4 | ₹3,012 |
| Total | ₹6,066 |
That is about 8% of the tax, for a delay of a few months. The return utility computes these figures for you; the point of the table is to show that the cost grows at every date you skip. A separate interest charge applies if the return itself is filed late.
How do I pay advance tax online?
Pay through e-Pay Tax on the income-tax portal; it takes about five minutes.
- Log in at incometax.gov.in and choose e-File, then e-Pay Tax, then New Payment.
- Pick the Income Tax tile. Select Tax Year 2026-27 and the payment type "Advance Tax (100)".
- Enter the amount and choose how to pay: net banking, debit card, the payment gateway (which takes UPI and credit cards), NEFT or RTGS, or over the counter at a bank.
- Download the challan receipt. It carries the BSR code, date and challan number that go into your return. The payment appears in your AIS and annual tax statement a few days later.
The two common slips are choosing the wrong year and choosing "Self-Assessment Tax (300)" instead of advance tax. Both can be corrected on the portal through a challan correction request. After paying, check the credit as described in our guide to AIS, TIS and Form 26AS.
What if my income changes, or I pay too much?
Revise the estimate at the next date and pay the difference; there is no form to file. If you overpay, the excess comes back as a refund after your return is processed. Keep a one-page working of each estimate. It explains your payments if the department later asks why an instalment was low.
Related reading
- Advance tax planner — free, no sign-up
- Old vs new tax regime for FY 2026-27
- Tax-loss and tax-gain harvesting
- Income tax for freelancers and the presumptive scheme
- What to do if you get an income-tax notice
FAQ
Is advance tax applicable for a salaried person?
Can a salaried person pay advance tax voluntarily?
Do I need to pay advance tax on capital gains from shares and mutual funds?
What happens if I miss the 15 September advance tax date?
How many times is advance tax paid in a year?
Do senior citizens have to pay advance tax?
Did the Income-tax Act, 2025 change advance tax?
Sources: Income Tax Department: tax payments and advance tax under the 2025 Act; Income-tax Act, 2025, text of s.408 and text of s.425; TaxGuru: advance tax under the Income-tax Act, 2025; ClearTax: advance tax FY 2026-27; form renumbering under the Income-tax Rules, 2026. All checked 19 Sep 2026. Worked examples use FY 2026-27 slabs, ignore surcharge and round to the nearest rupee.
Education only, not tax advice for your situation. Spotted an error? Write to us.
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