Advance tax is due once your tax crosses Rs 10,000, and the presumptive shortcut of paying by 15 March

Most salaried readers never think about advance tax, because their employer deducts TDS every month and the job is done. But the moment a second income appears - a fixed deposit throwing off interest, a capital gain on shares sold in July, a consulting invoice, rent from a second flat - the tax on that income is your responsibility to pay as you earn it. The trigger is a single, unchanging number: Rs 10,000. Once your estimated tax for the year, after subtracting TDS and TCS already collected, reaches Rs 10,000 or more, you are an advance-tax assessee and the instalment clock starts on 15 June.

This guide covers who owes advance tax for the current financial year 2026-27, the four instalment dates, the 1% per month interest charged when you miss them, and the single-instalment shortcut for taxpayers under the presumptive scheme on 15 March. Every figure below is drawn from the Income Tax Department's own tax-payments FAQ and the statute.

What the Section Says

The advance-tax liability provision is short and mechanical. Its operative words, as summarised on the Income Tax Department's tax-payments FAQ, are that "advance tax is payable if the amount of tax payable during the year, computed under the advance tax provisions, is Rs. 10,000 or more" (incometax.gov.in tax-payments FAQ). That Rs 10,000 is measured after deducting the TDS and TCS your payers have already remitted against your PAN - so a salaried person whose only extra income is Rs 40,000 of savings-bank interest, fully covered by TDS credits, may never cross the threshold, while a freelancer with no TDS deducted crosses it almost immediately.

The advance-tax regime was carried forward, substantially unchanged in substance, into the new Income Tax Act, 2025, which took effect on 1 April 2026 and governs the current financial year 2026-27. Readers who learned these rules as Section 208 (liability), Section 211 (instalments) and Sections 234B and 234C (interest) of the Income Tax Act, 1961 will find the same thresholds, the same 15 June to 15 March calendar and the same 1% per month interest re-enacted; only the section numbers were re-lettered (Income Tax Act text, indiacode.nic.in). The Rs 10,000 threshold, the four-instalment schedule and the presumptive single-instalment rule all survive intact.

The instalment calendar for a non-presumptive taxpayer is cumulative - each date is a running percentage of your total estimated liability, not a fresh quarter:

As of today, 17 September 2026, the first two instalments (15% and the cumulative 45%) have fallen due, and the next milestone is the third instalment of 75% on 15 December 2026. There is one important carve-out on the liability side: a resident individual aged 60 or above who has no income chargeable under "profits and gains of business or profession" is exempt from advance tax altogether and may settle the whole bill as self-assessment tax before filing. A retired reader living on pension, interest and dividends therefore owes no advance-tax instalments, however large the amount, provided there is no business income in the mix. That relief does not extend to seniors who run a business or practise a profession.

The presumptive shortcut sits inside the same framework. The Income Tax Department FAQ is explicit that "assessees opting for the presumptive taxation scheme ... must discharge their entire advance tax liability in a single instalment on or before 15 March" of the year. A professional taxed at 50% of gross receipts under the presumptive route, or a small trader taxed at 6% or 8% of turnover, therefore ignores the June, September and December dates entirely and pays 100% by 15 March 2027 - one cheque, one date.

Worked Example

Take Rhea, a Bengaluru brand consultant, whose income for FY 2026-27 has no TDS deducted at source. She estimates her total tax liability for the year at Rs 1,20,000. Because that figure is far above Rs 10,000 and none of it is covered by TDS, she is a full advance-tax assessee and must follow the four-instalment calendar. Applying the cumulative percentages to Rs 1,20,000:

If Rhea pays exactly these amounts on time, she owes no interest. Now suppose she forgets the 15 June instalment and pays nothing until 15 September. Under the deferment rule (the old Section 234C), interest runs at 1% per month on the shortfall of an instalment for the period of deferment. Her 15 June shortfall of Rs 18,000, deferred by three months to 15 September, attracts roughly Rs 18,000 x 1% x 3 = Rs 540 of interest - a small but entirely avoidable cost that compounds across every missed date.

The heavier penalty arrives if the year ends with under 90% of her assessed tax paid. Under the shortfall rule (the old Section 234B), interest at 1% per month runs from 1 April 2027 until she clears the balance through self-assessment tax. Had Rhea paid nothing all year and cleared her Rs 1,20,000 only when filing in July 2027, she would face 234B interest of about Rs 1,20,000 x 1% x 4 = Rs 4,800, on top of the 234C deferment interest. You can size your own liability first with the income-tax calculator and check how much TDS has already been credited using the TDS calculator before working out each instalment.

Now contrast Arjun, a physiotherapist with gross receipts of Rs 40 lakh who opts for the presumptive scheme for professions, under which 50% of receipts - here Rs 20 lakh - is deemed to be his taxable profit. Suppose the tax on that deemed income works out to Rs 1,56,000. Arjun ignores June, September and December entirely: his advance-tax liability is discharged in a single instalment of the full Rs 1,56,000 on or before 15 March 2027. He loses the option to spread the burden, but the compliance is far simpler, and provided he pays the whole amount by 15 March he attracts no deferment interest. Whether the presumptive route beats books-based taxation for you is a separate question worth modelling with the old vs new regime comparison; the scheme itself is explained in the presumptive taxation glossary entry.

Common Mistakes

The advance-tax provisions generate a predictable cluster of errors that surface in intimations and scrutiny. Watching for these five saves most readers the 1% per month interest:

Forgetting that the Rs 10,000 test is net of TDS. The threshold is estimated tax minus TDS and TCS already collected, not gross tax. A reader who computes Rs 45,000 of total tax but has Rs 40,000 covered by salary TDS has a residual of only Rs 5,000 - below Rs 10,000 - and owes no advance tax. Testing against gross tax leads people to over-pay instalments they never owed. Cross-check your credits in the advance-tax glossary entry and your Form 26AS before deciding.

Treating the instalments as independent quarters. The 15%, 45%, 75% and 100% figures are cumulative running totals, not four separate 25% slices. Paying "45%" on 15 September means your total paid to date must reach 45%, i.e. an extra 30 percentage points on top of June's 15% - not a second payment of 45%. Misreading this leaves a chronic shortfall that only 234C interest reveals.

Ignoring a mid-year capital gain or dividend. Because you cannot forecast a share sale in advance, the law allows the tax on capital gains and dividend income to be paid in the remaining instalments falling due after the income arises, without 234C interest for the earlier dates, provided it is paid by the next instalment date or 31 March. Forgetting it entirely by 31 March triggers 234B interest instead.

Senior citizens over-complying. A resident aged 60 or above with only pension, interest and dividend income owes no advance tax at all, yet many pay instalments out of caution. There is no penalty for paying, but no need to - the whole liability can be cleared as self-assessment tax before filing. This relief is separate from the higher basic exemption for seniors and the Section 80TTB interest deduction, both of which reduce the tax itself.

Presumptive taxpayers assuming nil liability. Some presumptive filers read the single-instalment relief to mean no advance tax at all, then pay nothing until filing and face 234B interest. The concession changes the timing to one instalment by 15 March 2027; it does not waive the tax.

FAQ

What is the advance-tax threshold for FY 2026-27?

Advance tax becomes payable once your estimated tax for the year, after subtracting TDS and TCS already collected against your PAN, is Rs 10,000 or more. The Income Tax Department's tax-payments FAQ states advance tax is payable "if the amount of tax payable during the year ... is Rs. 10,000 or more." Below Rs 10,000 net, you simply pay self-assessment tax before filing.

What are the four advance-tax due dates?

For a non-presumptive taxpayer in FY 2026-27 the cumulative schedule is 15% by 15 June 2026, 45% by 15 September 2026, 75% by 15 December 2026 and 100% by 15 March 2027. Each date is a running total of your full estimated liability, not a fresh quarter. As of 17 September 2026 the next due date is 15 December 2026.

How is advance-tax interest calculated?

Two 1% per month charges apply. The deferment charge (old Section 234C) runs at 1% per month on the shortfall of each instalment for the months it is deferred. The shortfall charge (old Section 234B) runs at 1% per month from 1 April of the assessment year if you paid less than 90% of your assessed tax during the year, until the balance is cleared. Both were re-enacted in the Income Tax Act, 2025.

Do senior citizens have to pay advance tax?

A resident individual aged 60 or above who has no income under "profits and gains of business or profession" is exempt from advance tax and can settle the whole amount as self-assessment tax before filing, however large it is. A senior who runs a business or practises a profession does not get this relief and must pay instalments like anyone else.

When do presumptive taxpayers pay advance tax?

In a single instalment. The Income Tax Department FAQ confirms presumptive-scheme assessees "must discharge their entire advance tax liability in a single instalment on or before 15 March" of the financial year - here 15 March 2027. They skip the June, September and December dates, but must still pay the full amount, or 234B interest applies.

Can I revise my advance-tax estimate during the year?

Yes. Advance tax is paid on your own estimate of annual income, and you are expected to revise it up or down as the year unfolds - topping up the next instalment if income rises, or paying less if it falls. The safe harbour is to have paid at least 90% of the finally assessed tax by 31 March to avoid 234B interest.

Where do I pay advance tax?

Advance tax is paid online through the e-filing portal at incometax.gov.in, selecting "Advance Tax (100)" as the payment type and the correct assessment year - AY 2027-28 for income of FY 2026-27. The challan reference appears in your Form 26AS and Annual Information Statement as a credit against your final tax.