Advance Tax Calculation and Payment
Advance tax means paying your income tax during the year, in four instalments, instead of in one lump sum when you file your return. If your tax for the year, after TDS and TCS, is ₹10,000 or more, the law expects you to pay by 15 June, 15 September, 15 December and 15 March. We estimate your income, size each instalment and pay it with you on the Income Tax e-filing portal.
What it is
Advance tax is income tax paid in the same year you earn the income. Salaried people rarely think about it, because the employer deducts TDS every month. Earn from a business, a profession, rent or capital gains, though, and nobody deducts enough tax for you. You pay it yourself, in instalments.
For tax year 2026-27, the rules sit in Sections 403 to 408 of the Income-tax Act, 2025, which replaced Sections 207 to 211 of the Income-tax Act, 1961. The dates, the percentages and the ₹10,000 limit stay the same. Interest for paying late now falls under Sections 424 and 425, the new homes of the familiar Sections 234B and 234C. You pay online through the e-Pay Tax service on the Income Tax e-filing portal, choosing Challan ITNS 280 and minor head 100 (advance tax).
Who it applies to
You run a business or practice
Proprietors, doctors, consultants, freelancers, firms, LLPs and companies. If the tax on your profit, after TDS, is ₹10,000 or more for the year, advance tax is due.
You earn a salary plus something else
Your employer’s TDS covers the salary only. Picture a Faridabad engineer who also lets out a flat and holds fixed deposits. The tax on that rent and interest alone can cross ₹10,000, and then the instalments apply.
You are a senior citizen
A resident aged 60 or more who has no income from business or profession does not pay advance tax at all. They clear any balance as self-assessment tax before filing the return. If they do run a business or practice, the normal rules apply.
Why it matters
Avoid 1% a month in interest
A shortfall attracts simple interest at 1% per month, and two separate interest charges can hit the same year. Both are avoidable.
Spread the cash outflow
Four smaller payments are easier to fund than one large bill at return time.
File with nothing left to pay
Paid correctly, advance tax leaves little or nothing due when you file, and less room for a demand notice later.
Instalment schedule at a glance
| Due date | Normal taxpayers (cumulative) | Presumptive taxpayers (44AD / 44ADA) |
|---|---|---|
| 15 June | At least 15% of the year’s tax | Nil |
| 15 September | At least 45% | Nil |
| 15 December | At least 75% | Nil |
| 15 March | 100% | 100% in one instalment |
Read the percentages as running totals. If your estimated tax after TDS is ₹1,00,000, you should have paid ₹15,000 by 15 June, ₹45,000 in total by 15 September, ₹75,000 by 15 December and the full ₹1,00,000 by 15 March.
Small businesses and professionals who declare income under the presumptive schemes (Sections 44AD and 44ADA of the 1961 Act, carried into the 2025 Act) can pay the whole amount in one go by 15 March. In practice, a chartered architect or IT consultant in Faridabad declaring income under 44ADA needs to act only once a year. Transporters under Section 44AE get no such relief; they follow all four dates.
Documents required
Income details
- Sales, receipts and expenses up to date (books or bank statements)
- Salary slips or expected salary for the year
- Rent agreements and rent received
- Interest certificates from banks and post office
Investments and gains
- Capital gains statements from your broker or mutual fund registrar
- Details of any property or shares sold during the year
- Proof of deductions, if you use the old regime
Tax already paid
- Form 26AS (Form 168 from tax year 2026-27) and AIS
- TDS certificates received so far
- Challans of advance tax paid in earlier instalments
- PAN and login for the e-filing portal or net banking
How it works
Project your income to 31 March
We take your income to date and project it to 31 March, adding rent, interest and any capital gains already booked.
Subtract TDS and TCS from the tax
We compute tax under the regime you will use, add surcharge and cess, and subtract TDS and TCS. If the balance is ₹10,000 or more, advance tax applies.
Pay through e-Pay Tax
We generate Challan ITNS 280 on the e-filing portal with minor head 100, and you pay by net banking, debit card, UPI or at the bank. Keep the BSR code and challan serial number for your return.
Re-estimate before every due date
Income rarely matches the June estimate. Say a Ballabgarh auto-parts supplier lands a large order in October: we raise the December instalment so the shortfall never builds up.
Claim every challan in your ITR
Advance tax paid appears in your tax credit statement and is claimed in the return. We match every challan before filing your income tax return.
Timelines
Next instalment: 15 December 2026
By 15 December 2026, at least 75% of your estimated tax for tax year 2026-27 should be paid. The June and September dates have passed.
Final instalment: 15 March 2027
100% of the year’s tax is due by 15 March 2027. Presumptive taxpayers pay their entire advance tax by this date.
Year closes: 31 March 2027
If less than 90% of your assessed tax is paid by 31 March, interest for the shortfall starts from 1 April 2027.
What happens if you pay late or too little
Interest for shortfall (old 234B, new 424)
If advance tax paid is less than 90% of your assessed tax, you pay simple interest at 1% per month on the shortfall, from 1 April after the year ends until the tax is paid.
Interest for deferment (old 234C, new 425)
If an instalment falls short, you pay 1% per month on the gap: for three months on the June, September and December instalments, and for one month on the March instalment.
Small slips are forgiven
Here is the margin: no deferment interest arises if you paid at least 12% by 15 June and 36% by 15 September. Tax on capital gains or dividends that arise later in the year can be paid in the remaining instalments without interest.
Frequently asked questions
Who has to pay advance tax?
Anyone whose tax for the year, after TDS and TCS, is ₹10,000 or more must pay advance tax. That includes individuals, firms, LLPs and companies. The one exception is a resident senior citizen aged 60 or above with no business or professional income; they can pay any balance as self-assessment tax. Salaried people usually fall outside because TDS covers them, unless they have sizeable rent, interest or capital gains. One estimate from us settles it.
What are the advance tax due dates for tax year 2026-27?
The due dates are 15 June 2026 (15%), 15 September 2026 (45%), 15 December 2026 (75%) and 15 March 2027 (100%). The percentages are cumulative, so each figure is the total that should be paid by that date. Presumptive taxpayers under Sections 44AD and 44ADA pay the full amount by 15 March 2027. If you missed an earlier date, pay the shortfall with the next instalment and the interest stays small.
How do I pay advance tax online?
Log in to the Income Tax e-filing portal, open e-Pay Tax and create a challan under ITNS 280. Choose the correct assessment or tax year and minor head 100 for advance tax. You can pay by net banking, debit card, UPI or over the counter at an authorised bank. Note the BSR code and challan serial number from the receipt, because you will need them in your return. We can generate the challan for you so the details are right.
How is interest under Section 234B or 424 calculated?
It is simple interest at 1% per month on the shortfall, charged if your advance tax is less than 90% of your assessed tax. Interest runs from 1 April after the year ends until you pay the balance, and a part of a month counts as a full month. Under the Income-tax Act, 2025 this is Section 424, with the same rate and the same 90% rule as the old Section 234B. Pay the balance early and the interest stops growing.
How does interest under Section 234C or 425 work?
It charges 1% per month on any instalment that falls short of the required percentage. The June, September and December shortfalls carry interest for three months each, and the March shortfall for one month. There is a margin: no interest arises if you paid at least 12% by 15 June and 36% by 15 September. Under the 2025 Act this rule is Section 425. Paying close to the schedule keeps the charge negligible.
Do presumptive taxpayers need to pay in four instalments?
No. If you declare income under Section 44AD (small business) or Section 44ADA (professionals), you can pay 100% of your advance tax in one instalment by 15 March. Interest for deferment applies only if that single payment is short or late. Transporters under Section 44AE do not get this relief and follow the normal four dates. For many small traders and consultants in Faridabad, this single date makes compliance simple.
Do senior citizens have to pay advance tax?
Not if they are resident, aged 60 or more, and have no income from business or profession. Pension, rent, interest and capital gains alone do not trigger advance tax for them. They pay any balance as self-assessment tax before filing the return, with no interest for skipping instalments. If a retired person runs a shop or practice, the ₹10,000 rule applies as usual. We can confirm which side you fall on in one call.
What if I sell shares or property in the middle of the year?
Pay the tax on that gain in the instalments that remain after the sale. If you could not have estimated the capital gain earlier, the law does not charge deferment interest on it, as long as the tax is paid in the next instalment or by 15 March. So a flat sold in November should be covered by 15 December. Tell us as soon as the sale is final and we will work out the amount.
What if I paid more advance tax than needed?
The extra amount comes back as a refund after you file your return. Your ITR claims all advance tax paid, and the department refunds any excess to your validated bank account once the return is processed, with interest where the law allows. Over-paying carries no penalty. Still, a careful estimate in December and March keeps the money working in your business.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
There is no government fee to pay advance tax itself. The only extra cost the law adds is interest at 1% per month for a shortfall or a late instalment.
Ready to begin?
Send us your income so far this year and we will tell you what to pay by 15 December 2026.