Advance tax means paying income tax during the year you earn the income, not after it ends. If your tax for tax year 2026-27, after TDS and TCS, will be ₹10,000 or more, you are expected to pay it in instalments.
The dates
| Pay by | Cumulative share of the year's tax |
|---|---|
| 15 June 2026 | 15% |
| 15 September 2026 | 45% |
| 15 December 2026 | 75% |
| 15 March 2027 | 100% |
Who does not need to pay
- Residents aged 60 or more with no business or professional income — they pay their tax when they file.
- Presumptive taxpayers (the small-business and professional schemes) pay the whole amount in one instalment by 15 March.
- Salaried people whose only income is salary — your employer's TDS normally covers it. Interest, rent or capital gains on top can change that.
What it costs to miss
Interest is simple interest at 1% a month, and part of a month counts as a whole month.
- Deferred instalments (old 234C, now section 425) — 1% a month for three months on each shortfall in June, September and December, and one month on March. There is no interest if you paid at least 12% by June and 36% by September.
- Short payment for the year (old 234B, now section 424) — if advance tax is below 90% of your tax, 1% a month from 1 April after the year ends until you pay.
- Late return (old 234A, now section 423) — 1% a month on the unpaid tax after the due date.
A worked example
Tax for the year ₹1,00,000, no TDS. Paid ₹10,000 by June and ₹20,000 more by September, nothing after. The balance of ₹70,000 was paid on 10 September of the next year, when the return was filed — after its 31 July due date.
| Interest | Amount |
|---|---|
| Deferred instalments (425 / 234C) | ₹2,650 |
| Short payment (424 / 234B) | ₹4,200 |
| Late return (423 / 234A) | ₹1,400 |
| Total | ₹8,250 |
That is over 8% on the tax, for paying late.
Two useful rules
- Gains you did not see coming — if a capital gain or dividend arises after an instalment date, there is no deferral interest for the earlier instalments, as long as you pay the tax on it in the remaining ones (or by 31 March).
- Paying early never hurts. Surplus advance tax is refunded with interest when your return is processed.
This article is general information based on the law as it stood on 12 Sep 2026. It is not advice for your situation — rules and dates change, and the right answer depends on your facts. Speak to us before acting on it.