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Advance Tax: Due Dates, Calculation & Interest (2026-27)

If tax is due beyond what TDS covers, the law wants it during the year itself — not at filing time. Here's who pays advance tax, the four instalments, and how the interest math works.

Who Must Pay Advance Tax?

  • Anyone whose estimated annual tax liability exceeds ₹10,000 after TDS
  • Typical cases: freelancers, business owners, landlords with multiple properties, big FD interest, capital-gains earners
  • Exception: resident senior citizens (60+) with no business/profession income don't need to pay it
  • Salaried people are usually fully covered by employer TDS — but a large side income (rent, trading, freelancing) can push them over the line

The 4 Instalments (Cumulative)

Due DateCumulative % of year's tax
15 June15%
15 September45%
15 December75%
15 March100%

Presumptive taxpayers (Sec 58/59 — old 44AD/44ADA) get a simpler deal: one single 100% instalment by 15 March.

Example — Freelancer Farhan's instalments
Estimated annual tax ₹1,20,000 (presumptive NOT opted — regular computation).
• By 15 Jun: 15% = ₹18,000
• By 15 Sep: cumulative 45% = ₹54,000 → pay ₹36,000
• By 15 Dec: cumulative 75% = ₹90,000 → pay ₹36,000
• By 15 Mar: cumulative 100% = ₹1,20,000 → pay ₹30,000
Miss these, and interest starts ticking under the new Act's Sections 415–417 (old 234B/234C equivalents) at ~1%/month on the shortfall.

Interest for Shortfalls — 234B/234C Logic

  • Deferment interest (old 234C): shortfalls in the Jun/Sep/Dec instalments — 1% for 3 months each (relaxed: no penalty if you've paid ≥12% by Jun and ≥36% by Sep)
  • Default interest (old 234B): if by 31 March you've paid < 90% of the total — 1%/month from April onwards on the shortfall
  • Advance tax underestimated but paid fully by 15 Mar → generally safe
  • Capital gains and unexpected windfalls mid-year? Pay advance tax in the next instalment after the gain — the law accepts this

How to Estimate & Pay

  • Estimate total income → compute tax (use our calculator) → subtract TDS already cut → if > ₹10,000, that's your advance-tax base
  • Pay on the e-filing portal via e-Pay Tax — create challan, pick 'Advance Tax', and choose the correct year label: now it's Tax Year 2026-27
  • Keep the challan (BSR, serial no., amount) — these credits appear in your AIS/Form 168
  • Re-estimate before each instalment — income estimates change, and so can your instalments
Common trap: selling shares/property in December and 'remembering' the tax in July. If the gain was made in Q3, advance tax was due by 15 March — the ITR payment then comes with interest. Pay in the next instalment after any big gain.
Presumptive = 1 InstalmentFiling After Advance TaxEstimate My TaxAsk the Community
🧮 Quick maths: who actually pays advance tax?
Rule: total tax minus TDS exceeds ₹10,000 in the year → advance tax applies (15/45/75/100% by Jun/Sep/Dec/Mar). Pure-salaried? Your TDS covers it — you're exempt from the whole exercise. Freelancer with ₹3L tax and ₹1L TDS? Balance ₹2L → quarterly installments mandatory. And the relief hardly anyone knows: 44ADA professionals pay 100% by 15 March in ONE installment — no quarterly tracking at all.

By TaxSetu Editorial Team · Last reviewed: 7 October 2026

Based on the Income-tax Act 2025, Income Tax Rules 2026 and CBDT notifications; sections per the Income-tax Act 1961 (as amended) with 2025-Act mappings where notified · Verify on the official portal: incometax.gov.in

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