Advance Tax for Tax Year 2026-27: Due Dates and Interest

For tax year 2026-27 you must pay advance tax if your estimated tax for the year, after TDS and TCS, is ₹10,000 or more. It is paid in four instalments: at least 15% by 15 June 2026, 45% by 15 September 2026, 75% by 15 December 2026 and the full amount by 15 March 2027. Presumptive-tax businesses and professionals can pay everything by 15 March instead. A resident individual aged 60 or more with no business or professional income does not have to pay advance tax at all. Paying late or too little attracts interest under sections 424 and 425 of the Income-tax Act, 2025.

Who has to pay

• The ₹10,000 test. Section 404 makes advance tax payable when the tax for the financial year, computed under section 405, is ₹10,000 or more.
• TDS and TCS count first. Section 405(1) computes advance tax as tax on your estimated income, minus tax that will be deducted or collected at source during the year. A salaried person whose employer deducts enough TDS usually owes nothing more.
• Senior citizens. Section 403(3) exempts a resident individual who is 60 or older at any time during the tax year and has no income under “Profits and gains of business or profession”. Pension, interest, rent and capital gains alone do not create a liability for them.

Typical people who do owe advance tax are freelancers and consultants, landlords, and investors with large interest or capital gains. Salaried people with substantial income their employer does not know about can owe it too.

The instalments

Section 408(1) sets the schedule. The amounts are cumulative:

Three more rules matter in practice:

• Presumptive taxation. Under section 408(2), a business declaring income under section 58(2) (Table: Sl. No. 1), or a professional under Sl. No. 3, pays the whole advance tax by 15 March. These are the successors of the old 44AD and 44ADA schemes.
• 31 March still counts. Section 408(3) treats any advance tax paid by 31 March as paid during that financial year.
• Estimates can change. Section 406(2) lets you increase or reduce later instalments as your estimate of income changes.

Interest for paying late: section 425

Section 425 charges interest when the cumulative amount paid by an instalment date falls short of the required share of the tax due on returned income. That is the tax on the income in your return, less TDS, TCS and specified reliefs.

For a presumptive-tax assessee, section 425(3) charges simple interest of 1% on any shortfall at 15 March.

Income you could not foresee. Section 425(4) waives this interest where the shortfall arises from underestimating, or failing to estimate, any of these:

• capital gains;
• dividends;
• winnings from lotteries, games and betting;
• business or professional income arising for the first time.

The condition is that you pay the full tax on that income in the remaining instalments, or by 31 March.

Interest for paying too little: section 424

Section 424 applies if you paid no advance tax, or paid less than 90% of the assessed tax. You then pay simple interest at 1% for every month or part of a month. It runs from 1 April after the tax year until your income is determined under section 270(1) or assessed, and it is charged on the shortfall.

If you pay the balance as self-assessment tax earlier, section 424(4) stops the interest on the amount paid from that date. This is why paying the remaining tax before filing the return, and as early as possible after 31 March, reduces the cost.

Worked example

Neha is a 34-year-old freelance consultant who does not use presumptive taxation. Her clients deduct some TDS. At the start of tax year 2026-27 she estimates tax after TDS of ₹2,00,000. She pays:

• nothing by 15 June 2026;
• ₹60,000 by 15 September 2026;
• ₹1,50,000 in total by 15 December 2026;
• ₹2,00,000 in total by 15 March 2027.

If her return shows exactly ₹2,00,000 of tax after TDS:

If her income was higher and the return shows ₹2,40,000. She files on 25 July 2027 and pays the ₹40,000 balance that day.

• Section 425 is recomputed on ₹2,40,000. The shortfalls are ₹36,000 in June, ₹48,000 in September, ₹30,000 in December and ₹40,000 in March. The interest is ₹1,080 + ₹1,440 + ₹900 + ₹400 = ₹3,820.
• Section 424 also applies, because ₹2,00,000 is less than 90% of ₹2,40,000 (₹2,16,000). Interest is 1% a month on ₹40,000 for April, May, June and part of July 2027, which is 4 months and ₹1,600.
• Total interest is ₹5,420. Paying the ₹40,000 on 31 March 2027 instead would have counted as advance tax under section 408(3) and removed the ₹1,600 of section 424 interest. The ₹400 for the 15 March instalment would still apply, because section 425 looks at what was paid by 15 March.

Illustrative figures; the portal’s computation governs. To test your own instalment dates and amounts, use the advance tax interest calculator, which works out interest under sections 424 and 425.

Practical steps

1. Estimate in early June, using last year’s income as a floor and adding known changes.
2. Subtract expected TDS, using Form 168 (the Annual Information Statement) and client contracts.
3. Revisit in September and December, especially after a property sale, a large dividend or a new contract.
4. Top up by 31 March rather than waiting for the return.
5. Keep challan details so the payment is credited to tax year 2026-27, not the wrong year.

FY 2025-26 is different

Advance tax paid up to 15 March 2026 related to previous year 2025-26 (AY 2026-27) and was governed by the Income-tax Act, 1961. Interest on any shortfall for that year appears in the AY 2026-27 return under that Act. See tax year vs assessment year for how the two labels fit together.

Where this fits

• Estimate the year’s tax: income tax calculator
• A freelancer’s view: advance tax on freelance income
• Presumptive schemes: when presumptive taxation saves money
• TDS credits that reduce advance tax: fixing a TDS mismatch

Sources. Income-tax Act, 2025, sections 58(2), 403 to 408, 424 and 425, Gazette of India, 21 August 2025. Finance Act, 2026, sections 3(14), 94 and 95, Gazette of India, 30 March 2026.