Advance tax payment for FY 2026-27: who must pay, the 15 December deadline and what missing it costs

By the author of From Rupees to Riches: Master the Indian Wealth Game. Published 3 November 2026.

Advance tax payment is how you pay income tax during the year on income that nobody deducts TDS from. You must pay it if the tax you will owe for FY 2026-27, after TDS, is ₹10,000 or more. It is due in four instalments: 15% by 15 June, 45% by 15 September, 75% by 15 December 2026 and 100% by 15 March 2027.

The next deadline is Tuesday, 15 December 2026. By then 75% of the year's advance tax should be paid. If you missed June and September, paying 75% by 15 December still stops most of the interest from building up.

From 1 April 2026 the Income-tax Act 2025 replaced the 1961 Act, and FY 2026-27 is now called tax year 2026-27. The rules on advance tax did not change in substance. The section numbers did: the old 234B and 234C interest charges are now sections 424 and 425.

Who must pay advance tax

The test is simple. Estimate your total tax for the year, subtract the TDS that has been or will be deducted, and look at what is left. If it is ₹10,000 or more, you pay advance tax (Income Tax Department).

If your only income is salary, your employer's TDS normally covers the full tax. You have nothing to pay. Advance tax catches salaried people when they have income on the side, such as:

• interest from FDs, NSC or other deposits where TDS does not cover the full tax;
• rent from a flat you own;
• capital gains from selling shares, mutual fund units or property;
• freelance or consulting fees.

Two groups are treated differently:

• Resident senior citizens (60 or above) with no business or professional income do not have to pay advance tax at all. They pay any balance as self-assessment tax before filing.
• People using presumptive taxation for business or professional income (the old 44AD and 44ADA) can pay the whole amount in one instalment by 15 March 2027.

Advance tax due dates for FY 2026-27

These are the instalments set by section 408. The percentages are cumulative, so each one includes what you paid before.

Anything you pay as advance tax by 31 March 2027 still counts as advance tax for the year. It just does not undo the interest for the instalments you missed.

A worked example: ₹18 lakh salary plus ₹2 lakh on the side

Take a salaried person in the new regime on ₹18 lakh a year. Their employer deducts TDS on the salary. The tax on salary alone is ₹1,50,800, and TDS covers it.

Now add ₹2 lakh of other taxable income on which no TDS was deducted. Total tax rises to ₹1,92,400. The extra ₹41,600 is advance tax, because it is above ₹10,000 and nobody has deducted it.

Tax worked out with the same code as the old vs new regime calculator, including 4% cess.

Watch the ₹12 lakh rebate edge too. On a ₹12 lakh salary in the new regime, tax is ₹0, so the employer deducts nothing. Add ₹1 lakh of side income with no TDS and the tax for the year becomes ₹26,000. That is advance tax, even though your payslip shows no tax at all. Our break-even guide explains how the rebate works.

What missing an instalment costs

Two separate interest charges apply. Both are simple interest, not a penalty.

Section 425 (deferment): 3% of the shortfall at each of the June, September and December instalments, and 1% of the shortfall at 15 March. You escape the June and September charges if you paid at least 12% by 15 June and 36% by 15 September. There is no such margin in December: you need the full 75%.

Section 424 (default): if your advance tax by 31 March is less than 90% of your tax, you pay 1% a month, or part of a month, on the shortfall from 1 April 2027 until you pay.

Here is what that means for the ₹41,600 in the example above.

The last row is ₹2,101 under section 425 for all four instalments, plus ₹1,664 under section 424 for April to July 2027. The department rounds amounts slightly when it computes interest, so your exact figure may differ by a few rupees.

One relief matters for investors. If the shortfall comes from capital gains or dividends that you could not have foreseen, there is no section 425 interest, as long as you pay the full tax on that income in the instalments due after you earn it, or by 31 March.

How to pay advance tax online

You pay on the income tax e-filing portal. The department's e-payment guide lists the same steps.

1. Open the portal and choose e-Pay Tax.
2. Enter your PAN and mobile number, then the OTP.
3. Choose Income Tax as the category.
4. Pick the year that covers April 2026 to March 2027, and choose Advance Tax as the type of payment.
5. Enter the amount and pay by net banking, debit card, UPI or at a bank counter.
6. Download the challan receipt. You will need the challan details when you file your return.

Credit card and UPI payments through the payment gateway carry a charge of 0.85% plus GST on top of the tax, according to the department's guide.

Questions people ask

Does interest on my savings account or FD count? Yes. It is taxable income. If the TDS on it is less than the tax you owe on it, the gap counts towards the ₹10,000 test.

I paid too much advance tax. What happens? You claim the excess as a refund when you file your return.

Does advance tax depend on my state? No. It is a central tax and the same rules apply everywhere in India.

Interest income from deposits is the most common trigger. You can see what the government schemes pay on the small savings rates page and the post office FD rates page.

For education only. Not investment, tax or legal advice. See our disclaimer.