Who Must Pay Advance Tax?

If your total income tax liability for FY 2026-27 (after TDS) is expected to exceed ₹10,000, you must pay advance tax in four installments.

Exempt from advance tax:

Senior citizens (age 60+) who do not have business income — they pay self-assessment tax
Persons whose only income is salary (employer deducts TDS via Section 192)

Important for professionals (44ADA) and presumptive business (44AD): Taxpayers opting for presumptive taxation can pay 100% advance tax by 15th March (single installment) instead of four installments.

Advance Tax Schedule — FY 2026-27

| Installment | Due Date | Cumulative % Required | |---|---|---| | 1st (15%) | 15th June 2026 | 15% of estimated tax | | 2nd (45%) | 15th September 2026 | 45% of estimated tax | | 3rd (75%) | 15th December 2026 | 75% of estimated tax | | 4th (100%) | 15th March 2027 | 100% of estimated tax |

How to Estimate Your Tax Liability

Project your income: Estimate total income from business/profession, salary (if secondary income), capital gains, rental income, other sources
Apply deductions: Planned 80C, 80D, HRA, home loan interest, etc. (or choose new regime with no deductions)
Compute tax: Apply slab rates (new or old regime) + surcharge + 4% health cess
Subtract expected TDS: Any TDS your employer, bank, or clients will deduct
Remaining = advance tax payable

For the first installment, a rough 15% calculation is fine. If business income is seasonal, compute conservatively but ensure you pay enough to avoid Section 234C interest (1% per month on shortfall).

How to Pay

Go to incometaxindia.gov.in → Payments → Challan 280
Select: Company / Individual as applicable
Type of payment: (100) Advance Tax
Assessment Year: 2027-28
Enter IFSC bank details and pay via net banking

Retain the challan counterfoil (BSR code, challan serial number, date) — you'll need it for ITR filing.

Section 234C Interest — Deferment Penalty

If you miss the June installment or underpay:

Interest = 1% per month on the shortfall (15% of net tax) × 3 months
Example: Net tax ₹5 lakh. Required June payment: ₹75,000. If you pay nothing: 1% × 3 × ₹75,000 = ₹2,250 interest

Action Checklist

[ ] Estimate FY 2026-27 income (business projections, salary, other income)
[ ] Compute estimated tax liability (net of TDS and deductions)
[ ] Pay 15% installment via Challan 280 — by 15th June 2026
[ ] Save challan receipt (BSR code + serial number)
[ ] Schedule calendar reminder for September 15th (2nd installment)