Advance Tax

Advance Tax Payment Schedule FY 2026-27: Due Dates, Interest under Sections 234B & 234C, and How to Avoid Penalties

Published by TaxaJ

Paying income tax at the end of the financial year is not the only way to meet your tax obligations. If your estimated tax liability exceeds ₹10,000 in a financial year, you are generally required to pay Advance Tax in installments. Timely payment helps taxpayers avoid unnecessary interest and ensures better financial planning.

In this article, we explain the Advance Tax Payment Schedule for FY 2026-27, the applicable due dates, and how Sections 234B and 234C of the Income-tax Act, 1961 apply for the relevant period.

What is Advance Tax?

Advance Tax is the income tax paid during the financial year as income is earned, instead of paying the entire tax amount at the time of filing the Income Tax Return (ITR).

It is applicable to:

Salaried individuals (where tax remains payable after TDS)

Freelancers

Professionals

Business owners

Partnership Firms

Companies

Individuals earning capital gains, interest, rental income or other taxable income

If your net tax liability after TDS/TCS is more than ₹10,000, Advance Tax provisions generally apply.

Advance Tax Due Dates – FY 2026-27

Due Date Minimum Cumulative Advance Tax Payable

15 June 2026 15%

15 September 2026 45%

15 December 2026 75%

15 March 2027 100%

Important: Any tax paid on or before 31 March 2027 is treated as Advance Tax for FY 2026-27, although delay in meeting the prescribed installments may still attract interest.

Advance Tax for Presumptive Taxation (Sections 44AD & 44ADA)

Taxpayers opting for the presumptive taxation scheme under Section 44AD or Section 44ADA are generally required to pay 100% of their Advance Tax liability on or before 15 March 2027 instead of quarterly installments.

Interest under Section 234C – Delay in Advance Tax Installments

Section 234C applies when the taxpayer fails to pay the required percentage of Advance Tax by the prescribed installment dates.

Interest is generally charged at 1% per month on the amount of the shortfall for the applicable period.

Example

Suppose your estimated Advance Tax liability is ₹2,00,000.

By 15 September, you should have paid 45%, i.e., ₹90,000.

If only ₹60,000 has been paid, there is a shortfall of ₹30,000, and interest under Section 234C may apply on that shortfall.

Interest under Section 234B – Non-payment of Advance Tax

Section 234B applies if:

Advance Tax paid is less than 90% of the assessed tax, or

Advance Tax has not been paid despite being liable.

In such cases, interest at 1% per month or part of a month is generally charged on the outstanding tax liability until payment.

How to Avoid Interest under Sections 234B & 234C

✔ Estimate your annual income accurately.

✔ Include all income such as:

Salary

Business or Professional Income

Capital Gains

Interest Income

Rental Income

Dividend Income

✔ Review your tax liability every quarter.

✔ Pay Advance Tax before each due date.

✔ Maintain proper records of tax payments.

Common Mistakes Taxpayers Make

Ignoring interest income while estimating tax.

Forgetting capital gains earned during the year.

Paying Advance Tax only in March.

Assuming TDS covers the entire tax liability.

Not revising the tax estimate after income increases.

Why Timely Advance Tax Payment Matters

Timely payment of Advance Tax:

Avoids interest under Sections 234B and 234C.

Improves cash flow planning.

Reduces last-minute tax burden.

Ensures smoother Income Tax Return filing.

Helps maintain better tax compliance.

Conclusion

Advance Tax is an important compliance requirement for businesses, professionals, freelancers, and many individual taxpayers. Missing the prescribed installment dates can result in avoidable interest under Sections 234B and 234C.

Planning your tax liability in advance and paying installments on time can save money, reduce compliance risks, and make the ITR filing process much easier.

Need Help with Advance Tax?

TaxaJ helps individuals, professionals, startups, and businesses with:

Advance Tax Calculation

Income Tax Planning

ITR Filing

Tax Compliance

GST & Business Advisory

Contact TaxaJ today and stay tax compliant with confidence.