Advance Tax FY 2026-27: Due Dates, How to Calculate, Pay Online & Penalty

In Advance tax system, tax is paid during the financial year, on estimated total income. Advance tax payment is compulsory for taxpayers with a tax due exceeding Rs. 10,000 after TDS/TCS for the year, as per the provisions of the Income Tax Act.

Advance Tax Payment - FY 2026-27

• The due date to pay the 2nd installment of advance tax payent for FY 2026-27 is 15th September 2026. 
• Taxpayers are required to pay at least 45% of their total tax liability in the 1st installment. 
• Non-payment or short-payment of advance tax will attract interest at the rate of 1% per month under sections 424 and 425 of the Income-tax Act, 2025.

What is Advance Tax?

Advance tax is a ‘pay-as-you-earn’ scheme of income tax, where taxpayers pay off their tax liability for the year in four installments rather than a one time lump sum payment during ITR filing. The provisions related to advance tax are covered under section 403 to section 410 of the Income Tax Act, 2025.

Who Should Pay Advance Tax?

Any taxpayer (including salaried individuals, freelancers, and businesses) whose estimated tax liability for the financial year after TDS /TCS exceeds Rs. 10,000 is required to pay advance tax as per the provisions of the Income Tax Act. 

Salaried Taxpayers

Employees should review their overall tax liability after considering TDS and include income from all other sources, such as capital gains, interest on deposits, and any additional income earned during the year, to determine whether they are liable to pay advance tax.

Senior Citizens

Senior citizen taxpayers (aged 60 years and above) are exempt from advance tax payment if they do not have business or professional income. When they have business income, advance tax provisions are applicable for them, and they need to pay advance tax when their estimated tax liability exceeds ₹10,000.

Investors - Capital Gains on Investments, Property and Crypto Assets

Assessees who actively invest in stock markets, who have capital gains transactions during the financial year should pay advance tax from the quarter in which capital gain incidence arises, when the tax liability exceeds ₹10,000.

Freelances Businesses and Presumptive Taxation

Taxpayers who earn business income during the financial year are subject to advance tax provisions, whether or not they are senior citizens. The normal threshold limit of ₹10,000 applies to businesses as well. 

Assessees opting for presumptive taxation can pay the entire advance tax in march. This benefit is available for them against the quarter-wise instalments for other taxpayers.

How to Calculate Advance Tax?

Here is a step by step guide to ascertain your advance tax liability and instalment amount.

1. Consider your income earned for preceding financial years. 
2. Ascertain how much more or less you will earn as compared to preceding years.
3. Consider all your eligible deductions and exemptions.
4. Make an estimate of your total taxable income. The below table will help you understand better.

Using ClearTax tax calculator, calculate the tax liability under the most beneficial tax regime for you.

Advance Tax Due Date For FY 2026-27

Taxpayers are required to pay a percentage of the tax liability as advance tax in four installments throughout the financial year. The due date for each advance tax payment installment is as follows:

Note: No interest under Section 425 is levied if at least 12% of total advance tax is paid by 15 June and at least 36% is paid by 15 September. 

For freelancers, small business owners and other professionals who have opted for the Presumptive Taxation Scheme under sections 44AD & 44ADA – 100% of the advance tax can be paid in a single instalment, within March 15 2027 , for FY 2026-27. This beneficial option is not available for taxpayers opting for presumptive taxation under section 44AE.

How to Pay Advance Tax Online?

The following step-by-step guide illustrates the procedure to pay advance tax online

1. Go to Income Tax e-filing portal, and login to your account with your user ID (PAN) and password.
2. Go to "e-file" and select “e-pay tax”.
3. On the top right corner, click on “New Payment”.
4. Various types of payments like TDS payment, equalisation levy, income tax options are available on the screen. Choose Income Tax - which contains advance tax and self assessment tax. Click ‘Proceed’.
5. Choose Tax Year 2026-27, and minor head as ‘Advance Tax’ with code 100.
6. Enter the components of tax like taxes, surcharge, cess, interest, etc.
7. Choose the mode of payment and click ‘Pay Now’ on the next page.
8. Read the terms and conditions, agree and then complete the payment through the mode chosen.

You can see the BSR code and challan serial number on the right side of the challan. Save a copy of this tax receipt for future reference. You will need to enter the BSR code and challan number in your tax return.

Note: Alternatively, you can pay advance tax without logging into your income tax account, through ‘Quick Links’ section. Choose ‘E-Pay Tax’ option, enter PAN and mobile OTP. You can choose the tax year, tax details and payment method to complete the tax payment.

How to verify Advance Tax Payment?

You will receive a confirmation email and SMS on the email ID and mobile number registered with the e-Filing portal. The Payment History section on the portal will also show the successful payment status, along with the CIN provided by the bank once the payment is confirmed.

Interest on Late Payment of Advance Tax

1. Interest on Advance Tax u/s 424

As per Section 424, you must pay at least 90% of the total taxes as advance tax or TDS/TCS by 31st March. Failure to make advance tax payments will result in an interest @1% on the unpaid amount.

2. Interest on Advance tax Instalments u/s 425

If the advance tax instalments are not paid within the specified due dates, interest at 1% per month is payable. 

Advance Tax liability will be 15%, 45%, 75%, and 100% of Net Tax Liability for the month of June, September, December, and March respectively.

Advance Tax Illustration

Priya is a software engineer who also freelances. Her employer deducts TDS on salary, but her freelance clients do not, so she must pay advance tax on the balance. She has chosen the old regime because her deductions favour it. On a net taxable income of ₹15,95,000 (after the standard deduction and her 80C and 80D claims), her total tax is ₹3,02,640, and after ₹60,000 employer TDS, ₹2,42,640 is payable in four instalments across the year.

Advance Tax - Income Tax Act 2025 Updates

Below is the comparison of Sections from the Income Tax Act 1961 with those in Income Tax Act 2025. 

Conclusion

For compliance with advance tax provisions, it is necessary to estimate the total income for the financial year proactively, and pay tax on such estimate within the prescribed due dates. Failure to meet this obligation attracts interest at 1% per month under Section 424 and 425. However, if excess advance tax is paid, the tax payer is eligible to claim a refund.