Advance Tax Due Dates, Calculation and Payment Rules for FY 2026-27

Current guide to advance tax under the Income-tax Act, 2025, including the ₹10,000 threshold, calculation method, four-instalment schedule, presumptive-tax payment rule and interest consequences.

What is Advance Tax?

Advance tax is income tax paid during the financial year in which the income is earned instead of waiting until return filing or regular assessment. It becomes relevant when tax remaining payable after considering deductible or collectible tax at source reaches the statutory threshold.

It commonly arises from business or professional income, capital gains, interest, rent, dividends and other taxable income for which TDS/TCS does not fully cover the year's tax liability.

Who is Liable to Pay Advance Tax?

For FY/Tax Year 2026-27, Section 404 of the Income-tax Act, 2025 requires advance tax where the amount payable during the financial year, computed under the advance-tax provisions, is ₹10,000 or more.

Resident senior-citizen exemption

Section 403 provides that the advance-tax requirement does not apply to an individual resident in India who is aged 60 years or more at any time during the tax year and has no income chargeable under the head "Profits and gains of business or profession".

Advance Tax Due Dates and Instalments for FY 2026-27

Section 408 prescribes four instalments for assessees other than those covered by the special presumptive-tax rule. The percentages are cumulative.

Any amount paid as advance tax on or before 31 March is treated as advance tax paid during that financial year under Section 408(3).

Advance Tax for Presumptive Taxation

Under the Income-tax Act, 2025, an assessee declaring profits and gains under the specified presumptive provisions in Section 58(2) must pay the whole advance-tax liability on or before 15 March under Section 408(2). This continues the single-instalment approach that applied to eligible presumptive taxpayers under Sections 44AD and 44ADA of the Income-tax Act, 1961.

How is Advance Tax Calculated?

Section 405 provides the computation mechanism. In simplified form:

Advance tax payable = income-tax on the specified sum at the rates in force − eligible tax deductible or collectible at source.

For a taxpayer paying on their own estimate under Section 406, the specified sum is the estimated current income. The estimate should include all relevant taxable income and the applicable deductions, exemptions, rebates and credits permitted by law.

• Estimate salary, business/professional income, interest, rent, dividends, capital gains and other taxable income.
• Apply the tax rates in force for the relevant financial year.
• Reduce eligible TDS/TCS as permitted by Section 405.
• Compare the resulting amount with the ₹10,000 threshold.
• Pay the required cumulative percentage by each due date.

Advance Tax and Capital Gains

Capital gains may arise after an earlier instalment date. Because advance tax is based on current income, the taxpayer should recompute the annual liability after a material capital gain or other unexpected income and make the appropriate adjustment in the remaining instalments.

Payment on Own Accord and Revision of Estimate

Section 406 requires a person liable for advance tax to pay it on their own accord according to the instalment percentages in Section 408. After paying one or more instalments, the assessee may increase or reduce the amount payable in later instalments so that payment accords with the revised estimate of current income and tax.

Payment pursuant to an Assessing Officer's order is dealt with separately under Section 407, one of the structural changes made in the 2025 Act to improve readability.

Advance Tax for Salaried Persons

Salaried employees usually have tax deducted by the employer. Advance tax may nevertheless become payable where additional taxable income-such as bank or fixed-deposit interest, rent, dividends or capital gains-creates a balance tax liability of ₹10,000 or more after taking eligible TDS/TCS into account.

Interest for Default or Deferment of Advance Tax

For Tax Year 2026-27 and subsequent years governed by the Income-tax Act, 2025, the principal interest provisions are Section 424 for default in payment of advance tax and Section 425 for deferment of instalments.

Section 424 generally applies where advance tax is not paid or where advance tax paid is less than 90% of assessed tax, and provides simple interest at 1% for every month or part of a month for the specified period. The Income Tax Department states that the advance-tax interest rates were not changed by the 2025 Act.

Income-tax Act, 1961 and Income-tax Act, 2025: Transition

Important Points

• For FY/Tax Year 2026-27, use the Income-tax Act, 2025 advance-tax provisions.
• The general liability threshold remains ₹10,000.
• Most liable assessees pay cumulatively 15%, 45%, 75% and 100% by 15 June, 15 September, 15 December and 15 March.
• Specified presumptive taxpayers under Section 58 pay the whole amount by 15 March.
• Revise the estimate when income changes materially during the year.
• Short payment or delayed instalments can result in statutory interest.

Official References

This page provides general information. Tax liability depends on the facts of the case, the rates in force for the relevant tax year, and applicable provisions, Rules, notifications and circulars.