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

Advance tax is a pay-as-you-earn mechanism under the Indian Income Tax Act that requires taxpayers to pay their estimated tax liability in installments throughout the financial year, rather than as a lump sum at the end. If your total tax liability for FY 2026-27 is ₹10,000 or more after deducting TDS, you are required to pay advance tax on the prescribed advance tax due dates.

Advance Tax Due Dates for FY 2026-27

For individual taxpayers, HUFs, and companies (other than those covered under the presumptive taxation scheme), advance tax is payable in four installments:

Presumptive Taxation (Section 44AD / 44ADA)

Taxpayers who opt for the presumptive taxation scheme under Section 44AD (eligible businesses) or Section 44ADA (specified professionals) are required to pay their entire advance tax liability in one single installment by 15 March 2027. Missing this date or underpaying attracts interest under Section 234B.

Who Must Pay Advance Tax?

• Any individual, HUF, firm, or company whose estimated tax liability is ₹10,000 or more for the financial year.
• Salaried employees whose employer deducts TDS may still need to pay advance tax on income from other sources such as interest, rent, capital gains, or freelance income.
• Senior citizens (aged 60 or above) who do not have income from business or profession are exempt from paying advance tax.

How to Calculate Advance Tax

Follow these steps to estimate your advance tax for FY 2026-27:

• Step 1: Estimate your total gross income from all sources — salary, business/profession, house property, capital gains, and other sources.
• Step 2: Deduct eligible deductions under Chapter VI-A (e.g., Section 80C, 80D, etc.) if you are under the old tax regime. Under the new default regime, most deductions are not available.
• Step 3: Compute tax on net taxable income using the applicable slab rates for FY 2026-27.
• Step 4: Add surcharge and Health & Education Cess at 4%.
• Step 5: Subtract TDS already deducted or expected to be deducted during the year.
• Step 6: If the remaining tax liability is ₹10,000 or more, pay advance tax as per the installment schedule.

To simplify this process, use KyaTax's Income Tax Calculator to quickly arrive at your estimated tax liability for FY 2026-27 under both the old and new tax regimes.

Penalty & Interest for Non-Payment or Short Payment

Section 234C – Deferment of Advance Tax

If you miss an installment or pay less than the prescribed percentage by the due date, interest is levied under Section 234C at 1% per month (simple interest) on the shortfall for a period of 3 months for each of the first three installments, and 1 month for the last installment (15 March).

Section 234B – Default in Payment of Advance Tax

If you have paid less than 90% of the assessed tax by 31 March of the financial year, interest is charged under Section 234B at 1% per month (or part of a month) from 1 April of the assessment year until the date of actual tax payment.

Important Notes on Capital Gains

If you have capital gains income that arises after 15 March (i.e., between 16 March and 31 March), the entire capital gains tax on such income can be paid in the advance tax installment due on 15 March or as self-assessment tax by 31 July of the assessment year, without attracting Section 234C interest specifically on that capital gains portion.

How to Pay Advance Tax

• Visit the Income Tax e-Filing portal (incometax.gov.in) and use Challan No. ITNS 280.
• Select the payment type as Advance Tax (Code 100).
• Payment can be made via net banking, UPI, debit card, or RTGS/NEFT through authorised banks.
• Always save your challan counterfoil (BSR code, date of deposit, and serial number) for future reference and ITR filing.

Frequently asked questions

What are the advance tax due dates for FY 2026-27?

The four advance tax due dates for FY 2026-27 are: 15 June 2026 (15%), 15 September 2026 (45%), 15 December 2026 (75%), and 15 March 2027 (100%). Taxpayers under the presumptive taxation scheme (Section 44AD/44ADA) pay 100% in one installment by 15 March 2027.

What happens if I miss the advance tax due date?

If you miss an installment or underpay, interest is charged under Section 234C at 1% per month on the shortfall for 3 months (or 1 month for the March installment). If total advance tax paid is below 90% of the assessed tax by 31 March, additional interest under Section 234B at 1% per month applies from 1 April of the assessment year onwards.

Are senior citizens required to pay advance tax?

No. Senior citizens who are 60 years of age or older and do not have any income from business or profession are exempt from paying advance tax under Section 207 of the Income Tax Act. However, if they have business income, advance tax rules apply normally.

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