Advance Tax 2026-27: Due Dates, Who Pays and Interest

Advance tax is income tax you pay during the year instead of all at once when filing. As of October 2026, you must pay it if your estimated tax for tax year 2026-27, after TDS, is ₹10,000 or more. Pay in four instalments by 15 June, 15 September, 15 December and 15 March, or you will owe interest of 1% a month on the shortfall.

What changed under the Income-tax Act, 2025

From 1 April 2026, advance tax sits in Sections 403 to 408 of the Income-tax Act, 2025 (old Sections 207 to 211), and the interest provisions are renumbered:

The rules, dates and rates are unchanged. Only the numbering and the term "tax year" (instead of "previous year") are new. Tax for FY 2025-26 still follows the old numbering.

Who must pay

You must pay advance tax if your estimated tax for the year, minus TDS and TCS, is ₹10,000 or more. This typically catches:

• Freelancers, consultants and professionals with no TDS or only 10% TDS on fees
• Business owners, including those using presumptive taxation (Section 58, old 44AD/44ADA)
• Salaried people with other income: rent, large FD interest, capital gains from shares or mutual funds, dividends
• Investors who book large capital gains during the year
• NRIs with Indian rental income or capital gains not fully covered by TDS

You do not need to pay advance tax if you are a resident senior citizen (60 or above during the year) with no income from business or profession. Their tax can be paid as self-assessment tax before filing.

Due dates for tax year 2026-27

If a due date falls on a bank holiday, payment on the next working day is generally accepted, but pay early to avoid portal and bank delays.

How to estimate your advance tax

1. Estimate total income for the year: salary, interest, rent, capital gains already booked, business or professional profit.
2. Pick your regime. The new regime is the default; see new vs old tax regime.
3. Compute tax at slab rates, with special rates for capital gains (12.5% on equity LTCG above ₹1.25 lakh, 20% on equity STCG), then add surcharge if applicable and 4% cess.
4. Subtract TDS and TCS that will be deducted during the year.
5. If the balance is ₹10,000 or more, split it by the percentages above.

Our income tax calculator handles steps 2 and 3. Re-estimate before each instalment, especially after a large sale or a new contract.

Worked example: a freelancer's instalments

Neha, a freelance designer, estimates her tax for 2026-27 at ₹2,00,000 after TDS deducted by clients. Her instalments should be:

What it costs to miss instalments

Scenario A: she skips June and September, then catches up. She pays ₹1,50,000 on 15 December and ₹50,000 on 15 March. Interest under Section 425 (old 234C):

• June shortfall: ₹30,000 × 1% × 3 months = ₹900
• September shortfall: ₹90,000 × 1% × 3 months = ₹2,700
• December and March: on schedule, nil
• Total interest: ₹3,600

Scenario B: she pays nothing during the year and pays the full ₹2,00,000 when filing on 31 July 2027.

Section 425 (old 234C), deferment interest:

• June: ₹30,000 × 3% = ₹900
• September: ₹90,000 × 3% = ₹2,700
• December: ₹1,50,000 × 3% = ₹4,500
• March: ₹2,00,000 × 1% = ₹2,000
• Subtotal: ₹10,100

Section 424 (old 234B), for paying less than 90% by 31 March: ₹2,00,000 × 1% × 4 months (April to July) = ₹8,000.

Total interest: ₹18,100, all avoidable. Interest is calculated on amounts rounded down to the nearest ₹100, and a part month counts as a full month, so actual figures can differ slightly.

The safety margins

You are not charged deferment interest for the first two instalments if you paid at least 12% by 15 June and at least 36% by 15 September. This gives a buffer when your income estimate turns out to be low.

Special cases

Capital gains and dividends. You cannot predict when you will sell an investment. If a capital gain or dividend arises after an instalment date, the tax on it can be paid in the remaining instalments, and no deferment interest is charged for the earlier dates on that portion. If the sale happens after 15 March, pay the tax by 31 March. Our guide to tax on FD, mutual funds and stocks covers the rates.

Salaried with side income. You can ask your employer to deduct extra TDS by declaring other income, which may avoid advance tax altogether. Many people find this simpler than tracking four dates.

Presumptive taxation. If you use presumptive taxation (Section 58 of the 2025 Act, old 44AD and 44ADA), you can pay all advance tax in one instalment by 15 March. Freelancers should read our freelancer tax guide for the eligibility limits.

Income that dropped. If your income falls during the year, you can pay less in later instalments. Interest is based on the tax actually due on your returned income, so overpaying early is not penalised, and any excess comes back as a refund with interest.

How to pay

1. Log in to the income tax e-filing portal and choose e-Pay Tax.
2. Select the tax year (assessment year 2027-28 in the portal's older wording, for income of 1 April 2026 to 31 March 2027; check the label the portal shows).
3. Choose the payment type Advance Tax.
4. Pay through net banking, debit card, UPI or a bank counter using the generated challan.
5. Save the challan with its BSR code, date and serial number. It will appear in Form 26AS (moving to Form 168) within a few days. Our article on Form 16, AIS and 26AS explains how to check it.

Choosing the wrong tax year or payment type is a common error. If it happens, a challan correction can be requested, so check the receipt immediately.

Key takeaways

• As of October 2026, advance tax is due if your estimated tax for 2026-27, after TDS, is ₹10,000 or more.
• Pay 15%, 45%, 75% and 100% (cumulative) by 15 June, 15 September, 15 December 2026 and 15 March 2027.
• Missing instalments costs 1% a month under Section 425 (old 234C), and paying under 90% by 31 March adds 1% a month under Section 424 (old 234B).
• Resident senior citizens without business income are exempt; presumptive taxpayers can pay once by 15 March.
• Re-estimate before every due date, and pay tax on capital gains in the next instalment after the sale.