Advance Tax: Who Must Pay, Due Dates and Interest
India collects tax as you earn. If your tax isn’t fully covered by TDS (for example, if you have business income, rent, capital gains, interest or freelance fees), you must pay advance tax during the year in instalments. The next deadline is 15 December 2026.
Who must pay?
Anyone whose estimated tax for the year, after TDS and TCS, is ₹10,000 or more.
Exempt: resident senior citizens (60+) who have no income from business or profession. They can pay all their tax as self-assessment tax before filing.
Typical payers:
- business owners, professionals and freelancers
- salaried people with large interest, rent or capital gains
- F&O and share traders
- landlords
- NRIs whose TDS is lower than their actual tax (less common)
Due dates for tax year 2026-27
| Due date | Pay at least (cumulative) |
|---|---|
| 15 June 2026 | 15% |
| 15 September 2026 | 45% |
| 15 December 2026 | 75% |
| 15 March 2027 | 100% |
Presumptive scheme (6%/8% business or 50% profession): pay 100% in one instalment by 15 March 2027.
How to calculate it
- Estimate your total income for the year: salary, business profit, rent, interest, capital gains so far.
- Work out the tax under your chosen regime, including special rates on capital gains.
- Subtract TDS and TCS already deducted or expected.
- If the balance is ₹10,000 or more, pay the required percentage by each due date.
Example: a consultant who keeps regular books (not the presumptive scheme) expects ₹18 lakh of taxable professional income after expenses. TDS of ₹1.2 lakh has been deducted by clients. Estimated tax under the new regime is ₹1,66,400 (₹1,60,000 plus 4% cess; professionals get no standard deduction), so ₹46,400 is left to pay. By 15 December, 75% of that (₹34,800) should have been paid in total.
Capital gains and one-off income
You can’t predict when you’ll sell shares or property. The law recognises this: advance tax on capital gains (and winnings, dividends) is due in the instalments remaining after the gain arises. Pay it in the next instalment and no interest is charged for the earlier dates.
Interest for missing it
Under the Income-tax Act, 2025 (sections 424 and 425, formerly 234B and 234C):
| Default | Interest |
|---|---|
| Instalments paid late or short (by any due date) | 1% per month on the shortfall, usually for 3 months for each instalment |
| Less than 90% of the tax paid by 31 March | 1% per month from April until you pay |
Relief: no interest is charged for the June instalment if you paid at least 12%, or for September if you paid at least 36%.
How to pay
- Go to the e-filing portal, then e-Pay Tax.
- Choose Advance Tax as the type of payment and the correct tax year or assessment year.
- Pay by net banking, UPI, card or NEFT/RTGS.
- Save the challan receipt (CIN) and claim it in your ITR.
Common mistake: choosing “self-assessment tax” instead of “advance tax”, or the wrong year. These can be corrected, but it takes time.
Frequently asked questions
I’m salaried. Do I need to pay advance tax?
Only if your other income (interest, rent, capital gains) creates tax of ₹10,000 or more beyond what your employer deducts. You can also ask your employer to deduct more TDS by declaring the other income.
I missed the September instalment. What now?
Pay the shortfall as soon as possible, at the latest with the 15 December instalment. Interest at 1% per month applies only on the shortfall for the period of delay.
Does advance tax apply to income earned before 1 April 2026?
The March 2026 instalment and the FY 2025-26 return remain under the 1961 Act. Instalments from June 2026 fall under the 2025 Act. The rules are essentially the same.
Need help estimating your advance tax before 15 December? Garvita Jain & Co. calculates and plans advance tax for professionals, businesses and investors. Contact us here, or at contact@garvitajainandco.com or +91 98678 16597.
This article is general information based on the law as of October 2026 and is not professional advice.
Sources
Official
Professional / CA publications