Advance Tax: Who Must Pay, Due Dates & How to Pay
Advance tax is the “pay as you earn” system: instead of paying your whole year's tax when you file the return, you pay it in four instalments during the year itself. It applies to anyone — salaried, freelancer, or business owner — whose estimated tax for the year (after TDS) is ₹10,000 or more. Miss the instalments and interest applies.
Who must pay advance tax?
- The ₹10,000 test: estimate your total tax for the year, subtract TDS/TCS already deducted — if the balance is ₹10,000 or more, you must pay advance tax.
- Salaried with only salary income: usually exempt in practice — employer TDS covers the liability. But add FD interest, rent, capital gains, or freelance income, and advance tax can kick in.
- Freelancers, professionals, businesses: almost always liable, since little or no TDS is deducted on their income.
- Exempt: resident senior citizens (60+) with no business/profession income need not pay advance tax at all.
- Presumptive taxation (44AD/44ADA): simpler — pay 100% in one instalment by 15 March.
Due dates for Tax Year 2026–27
| Instalment | Due date | Cumulative minimum |
|---|---|---|
| 1st | 15 June 2026 | 15% of estimated annual tax |
| 2nd | 15 September 2026 | 45% |
| 3rd | 15 December 2026 | 75% |
| 4th | 15 March 2027 | 100% |
The percentages are cumulative: by 15 September you top up so the total paid so far reaches 45% — you don't pay 45% again on top of June's 15%. Capital gains and other unpredictable income are handled with special timing rules — pay in the instalment following the quarter they arise.
How to pay advance tax online
Open e-Pay Tax
On incometax.gov.in → e-Pay Tax (works without login too).
Fill Challan 280
Select Challan 280, Major Head 0021 (Income Tax), Minor Head 100 (Advance Tax), and the correct Tax Year (2026–27).
Pay and save the challan
Pay via net banking, card, or UPI. Save the challan counterfoil (BSR code + challan serial number) — you need it when filing the return.
What happens if you miss or underpay?
Shortfalls attract interest at 1% per month (or part of a month): interest for default/deferment of advance tax (old Sections 234B/234C → new Sections 424/425). A practical cushion: paying at least 12% by June and 36% by September of the final liability generally avoids interest for those quarters even if your estimate was slightly off. When in doubt, overpay slightly — excess advance tax is refunded with interest after filing.
Frequently asked questions
Anyone whose estimated tax for the year, after subtracting TDS/TCS, is ₹10,000 or more — including salaried people with extra income, freelancers, and businesses. Resident senior citizens (60+) with no business income are exempt.
15 June 2026 (15%), 15 September 2026 (45% cumulative), 15 December 2026 (75% cumulative), and 15 March 2027 (100%). Presumptive-taxation cases pay 100% by 15 March.
On incometax.gov.in via e-Pay Tax: Challan 280, Major Head 0021, Minor Head 100 (Advance Tax), selecting the correct Tax Year. Save the challan details for your return.
Interest at 1% per month on shortfalls — under Sections 424/425 of the Income-tax Act, 2025 (earlier Sections 234B/234C). It's interest, not a fixed penalty, and it accrues monthly.
Usually not, if TDS covers your full liability. But if you earn significant FD interest, rent, capital gains, or freelance income beyond TDS, compute the balance — if it's ₹10,000+, advance tax applies.