Section references: for FY 2026-27 (tax year 2026-27) advance tax falls under the Income Tax Act, 2025 — liability Section 404 and instalments Section 408 (Sections 208 and 211 of the 1961 Act); interest Sections 424 and 425 (Sections 234B and 234C).
Quick answer: You need to pay advance tax if your tax for the year, after TDS, is ₹10,000 or more. For FY 2026-27 the remaining instalments are 75% of your estimated tax by 15 December 2026 and 100% by 15 March 2027. Pay late or short and you owe interest of 1% a month under sections 234B and 234C. Resident senior citizens with no business income are exempt, and presumptive taxpayers under 44AD or 44ADA pay one instalment by 15 March.
Salaried people rarely think about advance tax, because the employer deducts TDS. The surprise comes later. Rent income, interest, a capital gain or a side business adds tax that no one has deducted. Then the ITR shows a payment due and a line of interest nobody expected.
This guide explains who has to pay, the dates, and how the interest works, with a simple example you can check against your own numbers.
Who Has to Pay Advance Tax?
- Anyone whose total tax for the year, after TDS and TCS, comes to ₹10,000 or more.
- This covers salaried people with other income, freelancers, professionals, business owners, firms, LLPs and companies.
- Exempt: resident senior citizens (60 and above) who have no income from business or profession. They can pay the balance as self-assessment tax when they file.
- Presumptive taxpayers under section 44AD or 44ADA pay the full amount in one instalment by 15 March. Read our guide on the presumptive taxation scheme to see if you qualify.
If TDS already covers almost all your tax, you may owe nothing in advance. The test is the balance left after TDS, not your total income.
Advance Tax Due Dates for FY 2026-27
| Due date | Cumulative amount to be paid |
|---|---|
| 15 June 2026 | 15% of estimated tax |
| 15 September 2026 | 45% |
| 15 December 2026 | 75% |
| 15 March 2027 | 100% |
The percentages are cumulative. By 15 December you should have paid 75% in total, not 75% on top of what you paid before.
There is a small safety margin. No interest is charged for the June instalment if you have paid at least 12% by 15 June, and none for September if you have paid at least 36% by 15 September.
Missed June or September? Do not wait for March. Paying the shortfall now stops the interest from growing.
How the Interest Works (Sections 234B and 234C)
Advance tax does not carry a penalty as such. It carries interest, and there are two kinds.
Section 234C: you paid, but late or too little
If an instalment falls short, you pay 1% per month on the shortfall. It is charged for 3 months for the June, September and December instalments, and for 1 month for the March instalment.
Section 234B: you paid too little for the whole year
If the advance tax you paid by 31 March (plus TDS) is less than 90% of your final tax, you pay 1% per month on the shortfall. It starts from 1 April and runs until you pay.
A simple example
Say your tax after TDS for the year is ₹1,00,000, and you pay nothing until 15 March, when you pay the full ₹1,00,000.
- June shortfall: 15% = ₹15,000 × 1% × 3 months = ₹450
- September shortfall: 45% = ₹45,000 × 1% × 3 months = ₹1,350
- December shortfall: 75% = ₹75,000 × 1% × 3 months = ₹2,250
- Total 234C interest: ₹4,050
- 234B: nil, because you paid 100% before 31 March
Paying in instalments would have cost you nothing extra. It is the same tax, just paid on time. Surcharge and special cases can change the numbers, so treat this as an illustration.
What About a Capital Gain or Other Lump-Sum Income?
If you sell property or shares, or receive a dividend, the income may come late in the year. You are not expected to have paid advance tax on it before it arose. Pay the tax in the next instalment after the income arises, and no 234C interest should apply to that part. Our guide on capital gains tax on property covers the tax side.
How to Pay Advance Tax
- Estimate your income for the full year, including salary, rent, interest, business income and gains.
- Work out the tax under the regime you will choose, then subtract TDS and TCS. If you are unsure which regime suits you, see old vs new tax regime.
- Pay online through the Income Tax e-filing portal or your bank’s tax payment option, and select advance tax as the payment type.
- Keep the challan and match it with your Form 26AS or AIS before you file your return.
The Income-tax Act, 2025 came into force on 1 April 2026 and renumbered many provisions. The dates and the interest mechanics described here are the same. The section labels 234B and 234C are the ones most people still use. Our explainer on the Income-tax Act, 2025 covers what changed, and your CA can confirm the current section numbers for your return.
Mistakes We See Often
- Assuming TDS covers everything, when rent or interest income sits outside it.
- Paying the whole amount in March and then finding 234C interest on the earlier instalments.
- Estimating too low in the first half of the year and not topping up.
- Paying under the wrong assessment year or payment type, so the credit does not show.
- Forgetting that business owners with a tax audit follow the same dates. Keep our tax compliance calendar handy.
Frequently Asked Questions
Is advance tax only for businesses?
No. Salaried people also pay it when their tax after TDS is ₹10,000 or more, for example because of rent, interest or capital gains.
What is the next advance tax date?
15 December 2026, when 75% of your estimated tax for FY 2026-27 should be paid. The last date is 15 March 2027.
I missed the September instalment. What now?
Pay the shortfall as soon as you can. Interest under 234C is charged at 1% a month on the shortfall, so every month of delay adds to it.
Do senior citizens pay advance tax?
Resident senior citizens (60 and above) without business or professional income are exempt.
Can I pay advance tax after 15 March?
Tax paid up to 31 March counts as advance tax for the year. After that it is self-assessment tax and the interest rules apply.
What if I overpay?
The excess comes back as a refund when you file your ITR. Our guide on ITR filing in Vadodara explains the filing steps.
This article is general information, not professional advice. Dates, rates and section numbers can change, so confirm current rules before acting.