Advance tax: who pays, due dates and interest
Updated 11 October 2026
Advance tax means paying income tax during the year, in instalments, instead of in one go after the year ends. You must pay it if your tax for the year, after subtracting TDS and TCS, is ₹10,000 or more. For tax year 2026-27 the instalments are due on 15 June, 15 September and 15 December 2026, and 15 March 2027.
Who has to pay
- Salaried people with other income: TDS usually covers salary, but rent, interest, dividends or capital gains can leave ₹10,000 or more uncovered.
- Freelancers, consultants and professionals, whose income has no TDS or only partial TDS.
- Businesses of all sizes.
- Investors with large capital gains during the year.
Exception: resident senior citizens (60 and above) who have no business or professional income do not have to pay advance tax. They can pay their tax as self-assessment tax before filing.
Due dates for tax year 2026-27
| Pay by | Cumulative share of the year's tax |
|---|---|
| 15 June 2026 | At least 15% |
| 15 September 2026 | At least 45% |
| 15 December 2026 | At least 75% |
| 15 March 2027 | 100% |
Tax paid by 31 March is also treated as advance tax for the year. Businesses and professionals using the presumptive scheme can pay the whole amount in one instalment by 15 March 2027. As of mid-October 2026, the next instalment is 15 December 2026; if you missed the first two, pay what is due as soon as you can to limit interest.
Working out how much to pay
- Estimate your total income for the year from all sources.
- Work out the tax with slabs, rebate, surcharge and 4% cess, using your chosen regime.
- Subtract the TDS and TCS you expect for the year (check Form 26AS and AIS for TDS so far).
- If the balance is ₹10,000 or more, pay it in the instalments above.
Re-estimate before each instalment. If your income turns out higher, pay more in the later instalments; if lower, pay less. The income tax calculator helps with step 2.
By 15 June: 15% of ₹80,000 = ₹12,000.
By 15 September: 45% = ₹36,000 in total, so he pays ₹24,000 more.
By 15 December: 75% = ₹60,000 in total, so another ₹24,000.
By 15 March: 100% = ₹80,000, so the last ₹20,000.
If he skips the June instalment but has paid ₹36,000 by 15 September, he pays interest on the June shortfall only: 1% a month × 3 months × ₹12,000 = ₹360.
Interest if you pay late or too little
Two kinds of interest apply. Under the 1961 Act they were sections 234C and 234B; the 2025 Act renumbers them but keeps the rules.
- Deferment of instalments (old section 234C): if an instalment falls short, simple interest at 1% a month is charged on the shortfall for three months (one month for the March instalment). There is a small margin: no interest for the June and September instalments if you have paid at least 12% and 36% respectively.
- Default in advance tax (old section 234B): if the advance tax paid by 31 March is less than 90% of the tax finally assessed, interest at 1% a month runs from 1 April after the tax year until you pay the balance.
If you get a large capital gain or other unexpected income after an instalment date, there is no deferment interest for earlier instalments on the tax on that income, provided you pay it in the remaining instalments (or by 31 March if it arises after 15 March).
How to pay
Pay online through e-Pay Tax on the e-filing portal: choose income tax, the correct year and "Advance Tax" as the type of payment, then pay by net banking, debit card, UPI or NEFT/RTGS. Keep the challan with its identification number. The payment shows in Form 26AS within a few days and is claimed when you file your return. If you overpay, the excess is refunded after your return is processed.
Related: TDS on salary (you can ask your employer to deduct extra TDS to cover other income instead), how to file your ITR, and capital gains tax.