Quick answer: The second advance tax instalment for FY 2026-27 is due on 15 September 2026, by which point you should have paid 45% of your estimated annual tax liability. It applies if your total tax after TDS is ₹10,000 or more in the year. Salaried employees whose TDS covers everything usually need not bother, but if you have rental income, capital gains, freelance income, interest or dividends on the side, you probably do. Missing it triggers 1% monthly interest under Section 425.
Who has to pay
Advance tax applies to anyone whose total tax liability for the year, after subtracting TDS already deducted, comes to ₹10,000 or more. In practice that means:
- Freelancers and consultants, where clients deduct TDS at a lower rate than your actual slab.
- Business owners and professionals not covered fully by TDS.
- Salaried people with side income: rent, capital gains from shares or mutual funds, interest above what the bank deducted, or dividends.
- Anyone who sold property or made large capital gains this year.
- Resident individuals aged 60 or above are exempt if they have no business or professional income.
The instalment schedule
| Due date | Cumulative % of annual tax | Status |
|---|---|---|
| 15 June 2026 | 15% | Passed |
| 15 September 2026 | 45% | Due now |
| 15 December 2026 | 75% | Upcoming |
| 15 March 2027 | 100% | Final instalment |
The percentages are cumulative, not per instalment. By 15 September you need 45% of the year’s estimated tax paid in total, so if you paid 15% in June, you now pay another 30%.
Taxpayers under the presumptive taxation scheme (Sections 44AD and 44ADA) have a simpler rule: the entire advance tax is payable in one instalment by 15 March.
How to calculate it quickly
- Estimate your total income for FY 2026-27 from all sources.
- Subtract eligible deductions if you are on the old regime; the new regime has far fewer.
- Compute tax on the balance at your applicable slab rates, then add the 4% health and education cess.
- Subtract TDS already deducted or expected to be deducted for the year. Check Form 26AS and the AIS on the income tax portal for what has actually been credited.
- If the remaining figure is ₹10,000 or more, that is your advance tax liability. Pay 45% of it by 15 September, minus anything already paid in June.
Estimating on the high side is safer than the low side, because underpayment costs interest while overpayment comes back as a refund.
How to pay in five minutes
- Go to incometax.gov.in and click e-Pay Tax under Quick Links. Login is not required for this.
- Enter your PAN, confirm it, and verify the OTP sent to your mobile.
- Select Income Tax, then the Income-tax Act, 2025 and Tax Year 2026-27.
- Select Advance Tax (100) as the type of payment.
- Enter the amount under the tax head, then pay by net banking, UPI, debit card, or over the counter at an authorised bank.
- Download the challan immediately. You need the BSR code, challan serial number and date when filing your return.
What it costs to miss it
| Section | When it applies | Interest |
|---|---|---|
| 425 | Shortfall in a specific instalment | 1% per month for 3 months on the shortfall |
| 424 | Less than 90% of total tax paid by 31 March | 1% per month from April until you pay |
| 234A | Filing the return after the due date | 1% per month on unpaid tax |
These stack. Someone who skips instalments and files late can end up paying 234A, 424 and 425 together, which is why the September date is worth an hour of attention now.
Common mistakes
- Choosing the wrong period. For income earned from April 2026 to March 2027, select Tax Year 2026-27 under the Income-tax Act, 2025.
- Selecting “Self Assessment Tax (300)” instead of “Advance Tax (100)”. Both are payable but they are reported differently.
- Forgetting capital gains. Gains realised after an instalment date get relief under a special proviso, but gains already realised must be included.
- Assuming TDS covers everything. Banks deduct 10% on interest; if you are in the 30% bracket, the remaining 20% is yours to pay.
- Not checking the AIS, which now captures dividends, interest, securities transactions and property deals that you may have forgotten.
Frequently asked questions
I am salaried with only salary income. Do I need to pay?
Generally no. Your employer’s TDS should cover the liability. Check Form 26AS to confirm nothing is short, particularly if you changed jobs during the year.
What if I overpay?
The excess is refunded after you file your return, with interest under Section 244A in most cases.
Can I pay the whole year’s tax now instead of in instalments?
Yes. Paying early is always allowed and avoids any interest risk.
I missed the June instalment. What now?
Pay the cumulative 45% now. The June shortfall may still attract the prescribed instalment interest; paying now does not erase that charge.
Published 5 September 2026. Tax rules and portal menus change; verify current provisions on incometax.gov.in or with a qualified tax professional. General information, not tax advice.
Sources
Checked against: Income Tax Department — tax payments and the 2025 Act transition. Rules, fees and rates change — check the official page before you act on anything here.
Article Was Generated By AI.