If your total income tax liability for the year exceeds ₹10,000, you are required to pay it in instalments throughout the year — not just at the end. This is called advance tax, and missing its due dates can cost you interest at 1% per month under Sections 234B and 234C of the Income Tax Act.
This guide covers everything: what advance tax is, who must pay it, the complete due date schedule for FY 2026-27, how to calculate your liability, and how to pay it online in minutes.
What is advance tax?
Advance tax is income tax paid in advance — during the financial year in which you earn the income, rather than at the end of the year when you file your ITR. It is also called “pay as you earn” tax.
The logic is straightforward: the government wants tax revenue throughout the year, not in a single lump sum in March. So if your annual tax liability is significant, you must estimate your income and pay tax in four instalments.
Who must pay advance tax?
You are required to pay advance tax if your estimated tax liability for the financial year exceeds ₹10,000 after deducting TDS (Tax Deducted at Source).
This includes:
- Salaried employees with income from other sources (interest, rent, capital gains, freelance income) where total liability after TDS exceeds ₹10,000
- Self-employed professionals — doctors, lawyers, consultants, freelancers
- Business owners — proprietors, partners, directors
- Investors with significant capital gains, dividend income, or interest income
- Senior citizens — those aged 60 and above are exempt from advance tax only if they have no income from business or profession
Advance tax due dates for FY 2026-27 (AY 2027-28)
There are four advance tax instalments each financial year. Here are the due dates and the minimum percentage of total annual tax liability to be paid by each date:
| Instalment | Due date | Minimum % to pay | Cumulative % paid |
|---|---|---|---|
| 1st instalment | 15 June 2026 | 15% | 15% |
| 2nd instalment | 15 September 2026 | 45% | 45% |
| 3rd instalment | 15 December 2026 | 75% | 75% |
| 4th instalment | 15 March 2027 | 100% | 100% |
Advance tax due dates for FY 2025-26 (AY 2026-27) — for reference
| Instalment | Due date | % to pay |
|---|---|---|
| 1st instalment | 15 June 2025 | 15% |
| 2nd instalment | 15 September 2025 | 45% |
| 3rd instalment | 15 December 2025 | 75% |
| 4th instalment | 15 March 2026 | 100% |
Special rule for presumptive taxation (Section 44AD / 44ADA)
Businesses and professionals opting for presumptive taxation under Section 44AD or 44ADA have a simpler schedule — they must pay 100% of their advance tax in a single instalment by 15 March of the financial year.
| Taxpayer type | Instalments | Due date |
|---|---|---|
| Regular taxpayers (salaried, business, capital gains) | 4 instalments | 15 Jun, 15 Sep, 15 Dec, 15 Mar |
| Presumptive taxation (44AD / 44ADA) | 1 instalment | 15 March only |
How to calculate your advance tax liability
Follow these steps to estimate your advance tax for the year:
Step 1 — Estimate your total income
Add up all income sources for the full financial year: salary, business profits, rental income, interest income, capital gains, and any other income.
Step 2 — Deduct applicable deductions
Subtract deductions under Chapter VIA — Section 80C (up to ₹1.5 lakh), 80D (health insurance), 80TTA (savings interest), HRA, and others you are eligible for.
Step 3 — Calculate tax on net taxable income
Apply the income tax slab rates for the relevant financial year to your net taxable income. Add surcharge and cess (4% health and education cess) as applicable.
Step 4 — Deduct TDS already paid
Subtract the TDS already deducted by your employer, bank, or other deductors. Check Form 26AS on the income tax portal for your TDS details.
If this figure exceeds ₹10,000, you must pay advance tax. Pay the relevant percentage by each due date.
Interest penalty for missing advance tax due dates
Missing advance tax instalments attracts interest under two sections of the Income Tax Act:
| Section | Applies when | Interest rate | Period |
|---|---|---|---|
| Section 234C | Advance tax instalments paid short or late | 1% per month | 3 months per shortfall |
| Section 234B | Less than 90% of total tax paid as advance tax | 1% per month | From April 1 to date of assessment/payment |
How to pay advance tax online — step by step
Paying advance tax is straightforward through the income tax e-filing portal:
- Go to incometax.gov.in and log in with your PAN and password
- Click on e-Pay Tax under the Quick Links section
- Select Income Tax and click Proceed
- Choose Assessment Year 2027-28 (for FY 2026-27 advance tax)
- Select Type of Payment: (100) Advance Tax
- Enter the amount — break it into Income Tax, Surcharge, and Cess fields as applicable
- Choose your bank and complete the payment via net banking or debit card
- Download the Challan 280 receipt — save this for your ITR filing
Advance tax vs TDS vs self-assessment tax — what is the difference?
| Advance tax | TDS | Self-assessment tax | |
|---|---|---|---|
| Who pays | Taxpayer directly | Deductor (employer, bank) | Taxpayer at ITR filing |
| When paid | During the FY in 4 instalments | At source, throughout year | Before filing ITR (by 31 July) |
| Challan type | Challan 280 — code 100 | Challan 281 | Challan 280 — code 300 |
| Penalty for non-payment | Interest under 234B & 234C | Penalty on deductor | Interest under 234A |
Quick reference — advance tax at a glance
| Question | Answer |
|---|---|
| Who must pay | Anyone with tax liability > ₹10,000 after TDS |
| FY 2026-27 due dates | 15 Jun, 15 Sep, 15 Dec, 15 Mar |
| Instalments required | 4 (or 1 for presumptive taxation) |
| How to pay | incometax.gov.in → e-Pay Tax → Challan 280 |
| Penalty for missing | 1% per month under Section 234B / 234C |
| Senior citizen exemption | Yes — if no business/profession income |
The bottom line
Advance tax is not optional if your liability exceeds ₹10,000 — and the penalties for missing due dates are real. The good news is that paying advance tax online takes less than 10 minutes and the Challan 280 receipt gives you a clean audit trail for your ITR.
Mark the four dates in your calendar now: 15 June, 15 September, 15 December, and 15 March. Set a reminder two weeks before each date to estimate your income and pay on time.
For more on understanding your tax liability, read: What is PAT (Profit After Tax)? and PAT Full Form in Finance & Business.