Quick Answer
10 min read|Updated: Apr 1, 2026|Income-tax
Quick Answer
Advance tax must be paid by any person whose estimated tax liability (after TDS/TCS) exceeds ₹10,000 for the financial year. For AY 2026-27 (FY 2025-26), the four quarterly due dates are: 15 June (15%), 15 September (45%), 15 December (75%), and 15 March (100%).
| Slab | Tax (₹) |
|---|---|
| Up to ₹4,00,000 — Nil | 0 |
| ₹4,00,001 to ₹8,00,000 — 5% | 20,000 |
| ₹8,00,001 to ₹12,00,000 — 10% | 40,000 |
| ₹12,00,001 to ₹16,00,000 — 15% | 60,000 |
| ₹16,00,001 to ₹20,00,000 — 20% | 80,000 |
| ₹20,00,001 to ₹24,00,000 — 25% | 1,00,000 |
| ₹24,00,001 to ₹32,00,000 — 30% | 2,40,000 |
| Total Tax | 5,40,000 |
| Add: 4% Health & Education Cess | 21,600 |
| Total Tax + Cess | 5,61,600 |
| Less: TDS on professional fees (Section 194J) — estimated | (84,000) |
| Less: TDS on FD interest (Section 194A) — estimated | (2,400) |
| Net Advance Tax Liability | 4,75,200 |
Quarterly Instalment Schedule:
- 15 June 2025: 15% of ₹4,75,200 = ₹71,280
- 15 September 2025: 45% cumulative = ₹2,13,840 − ₹71,280 paid = ₹1,42,560
- 15 December 2025: 75% cumulative = ₹3,56,400 − ₹2,13,840 paid = ₹1,42,560
- 15 March 2026: 100% = ₹4,75,200 − ₹3,56,400 paid = ₹1,18,800
Capital Gains & Unexpected Income in Advance Tax
Capital gains, lottery winnings, and other windfall income often arise unexpectedly during the year. The Income Tax Act 2025 provides relief for such situations:
- If income of the nature of capital gains, lottery winnings, or other unexpected income arises after any instalment due date has passed, the assessee must include such income in the remaining instalments.
- The entire advance tax on such income should be paid in the remaining instalment(s) immediately following the quarter in which the income arises.
- No Section 234C interest is charged for shortfall in earlier instalments attributable to capital gains or unexpected income that had not yet arisen.
- Example: If you sell property and earn LTCG in November 2025, you need not have included it in the June or September instalments. Include it in the December (15 Dec) and March (15 Mar) instalments.
Presumptive Taxation — Single Instalment by 15 March
Assessees opting for presumptive taxation under Section 44AD (business with turnover up to ₹3 crore) or Section 44ADA (professionals with receipts up to ₹75 lakh) enjoy a significant relaxation:
- They are not required to pay advance tax in four quarterly instalments.
- The entire advance tax can be paid in a single instalment on or before 15 March of the financial year.
- No Section 234C interest is charged for not paying in the June, September, or December instalments.
- However, if the total advance tax paid by 15 March is less than the assessed tax, Section 234B interest applies from 1 April onwards.
Section 234B — Interest for Non-Payment / Short Payment of Advance Tax
Section 234B charges interest when the total advance tax paid during the year is less than 90% of the assessed tax liability:
- Rate: Simple interest at 1% per month (or part of a month).
- Period: From 1 April of the assessment year (i.e., 1 April 2026 for AY 2026-27) to the date of determination of income (processing of return or assessment).
- On what amount: The difference between “assessed tax” (tax on total income minus TDS/TCS/MAT credit) and advance tax actually paid.
- Trigger: Advance tax paid < 90% of assessed tax. If advance tax is 90% or more, no Section 234B interest.
- If no advance tax at all: Interest applies on the entire assessed tax amount (minus TDS/TCS).
Section 234C — Interest for Deferment of Advance Tax Instalments
Section 234C charges interest for shortfalls in individual quarterly instalments. Unlike Section 234B (which looks at total advance tax), Section 234C examines whether each instalment was paid on time:
| Instalment Due Date | Minimum Cumulative Payment | Interest Period | Interest Rate |
|---|---|---|---|
| 15 June | 15% of estimated tax | 3 months (on shortfall from 15%) | 1% per month |
| 15 September | 45% of estimated tax | 3 months (on shortfall from 45%) | 1% per month |
| 15 December | 75% of estimated tax | 3 months (on shortfall from 75%) | 1% per month |
| 15 March | 100% of estimated tax | 1 month (on shortfall from 100%) | 1% per month |
Important: “Estimated tax” for Section 234C purposes means the tax on returned income (not assessed income). If you underestimate income and then the assessment results in higher tax, Section 234B covers the additional liability, not 234C.
Interest Computation Example — Section 234B & 234C
Scenario: Mr. Anil has assessed tax (after TDS) of ₹3,00,000 for AY 2026-27. He paid advance tax as follows:
| Due Date | Required (Cumulative) | Actually Paid (Cumulative) | Shortfall |
|---|---|---|---|
| 15 June | 45,000 (15%) | 0 | 45,000 |
| 15 September | 1,35,000 (45%) | 1,00,000 | 35,000 |
| 15 December | 2,25,000 (75%) | 2,00,000 | 25,000 |
| 15 March | 3,00,000 (100%) | 2,50,000 | 50,000 |
Section 234C interest:
- June shortfall: ₹45,000 x 1% x 3 months = ₹1,350
- September shortfall: ₹35,000 x 1% x 3 months = ₹1,050
- December shortfall: ₹25,000 x 1% x 3 months = ₹750
- March shortfall: ₹50,000 x 1% x 1 month = ₹500
- Total 234C interest: ₹3,650
Section 234B interest: Total advance tax paid = ₹2,50,000. Assessed tax = ₹3,00,000. Since ₹2,50,000 is less than 90% of ₹3,00,000 (= ₹2,70,000), Section 234B applies on ₹50,000 (₹3,00,000 − ₹2,50,000) at 1% per month from April 2026 until the return is processed (say, 3 months) = ₹50,000 x 1% x 3 = ₹1,500.
Online Payment — Challan 280 & e-Pay Tax Portal
Advance tax is paid online through the Income Tax Department’s e-Pay Tax facility:
- Visit eportal.incometax.gov.in and log in with your PAN.
- Navigate to e-Pay Tax under the “e-File” menu.
- Select Challan No. ITNS 280 (Income Tax).
- Select Assessment Year: 2026-27.
- Select Type of Payment: (100) Advance Tax.
- Choose payment method: Net banking, Debit card, UPI, NEFT/RTGS, or Pay at Bank Counter.
- Enter the amount and complete the payment.
- Save the challan receipt — note the BSR code, challan serial number, and date of deposit for reporting in your ITR.
Advance Tax vs Self-Assessment Tax — Key Differences
| Parameter | Advance Tax | Self-Assessment Tax |
|---|---|---|
| When paid | During the financial year (before year-end) | After year-end, before filing ITR |
| Based on | Estimated income for the year | Actual computed income |
| Challan code | Challan 280 — Type (100) | Challan 280 — Type (300) |
| Interest for non-payment | Section 234B (1% p.m.) + 234C (1% p.m.) | No separate interest — but 234B continues until payment |
| Who pays | All assessees with tax > ₹10,000 after TDS | All assessees with balance tax payable after advance tax and TDS |
| Impact on ITR filing | Must be paid before due dates during the year | Must be paid before filing ITR |
Changes from Income Tax Act 1961
- No substantive changes to advance tax structure: The ₹10,000 threshold, quarterly schedule (15 June/Sep/Dec/Mar), and instalment percentages (15/45/75/100) remain identical.
- Section 234B and 234C interest: Rates and computation methodology are carried forward unchanged at 1% per month.
- Presumptive taxation single instalment: The relaxation for Section 44AD/44ADA assessees (single payment by 15 March) continues.
- Senior citizen exemption: The exemption for senior citizens (60+) without business income from advance tax payment is retained.
- Section re-numbering: While the substance is unchanged, the section numbers and references within the 2025 Act framework have been updated.
- Digital payment emphasis: The 2025 Act reinforces the e-Pay Tax portal as the primary payment channel, with physical challans being progressively phased out.
Expert Tip — CA V. Viswanathan
A common mistake is paying the entire advance tax only in March — this saves no interest under Section 234B but attracts significant 234C interest for missing the June, September, and December instalments. Always pay at least the minimum cumulative percentage at each due date. If you earn capital gains mid-year, include them in the immediately next instalment to avoid unnecessary interest. Remember to reconcile your TDS credits via Form 26AS before computing advance tax.
Key Takeaways
- Pay advance tax if your tax liability after TDS/TCS exceeds ₹10,000.
- Four quarterly instalments: 15 June (15%), 15 September (45%), 15 December (75%), 15 March (100%).
- Senior citizens (60+) without business income are exempt from advance tax.
- Presumptive taxation assessees can pay in a single instalment by 15 March.
- Section 234B interest: 1% per month on shortfall if advance tax < 90% of assessed tax.
- Section 234C interest: 1% per month for 3 months on instalment shortfalls.
- Capital gains earned mid-year only need to be included in remaining instalments — no penalty for earlier shortfall.
- Pay via e-Pay Tax portal using Challan 280, payment type (100).
For advance tax computation assistance, filing income tax returns, or resolving interest disputes, contact Virtual Auditor. See also our penalties and interest guide and ITR filing services.
Frequently Asked Questions
Who is required to pay advance tax for AY 2026-27?
Any person — individual, HUF, firm, company, or other assessee — whose estimated tax liability after deducting TDS and TCS exceeds ₹10,000 for the financial year must pay advance tax. Senior citizens (60+) without business or professional income are exempt and can pay their entire tax as self-assessment tax when filing their return.
What are the advance tax due dates for FY 2025-26?
The four quarterly due dates for FY 2025-26 (AY 2026-27) are: 15 June 2025 (minimum 15% cumulative), 15 September 2025 (minimum 45% cumulative), 15 December 2025 (minimum 75% cumulative), and 15 March 2026 (100%). Presumptive taxation assessees under Section 44AD/44ADA can pay the entire amount in a single instalment by 15 March 2026.
What interest is charged for non-payment of advance tax under Section 234B?
Section 234B charges simple interest at 1% per month (or part thereof) on the shortfall in advance tax. It applies when advance tax paid is less than 90% of the assessed tax. Interest runs from 1 April of the assessment year until the date of determination of income. The shortfall is computed as assessed tax minus advance tax paid (assessed tax = tax on total income minus TDS/TCS).
What is the difference between Section 234B and Section 234C interest?
Section 234B charges interest on the total shortfall in advance tax (when total advance tax is less than 90% of assessed tax). Section 234C charges interest for shortfall in individual quarterly instalments (when cumulative payment is less than 15%/45%/75%/100% at each due date). Both can apply simultaneously — 234C for instalment deferment during the year, and 234B for overall shortfall after March.
Are senior citizens exempt from advance tax?
Senior citizens aged 60 or above who do not have any income from business or profession are fully exempt from advance tax. They can pay their entire tax liability as self-assessment tax at the time of filing their return. However, senior citizens earning business or professional income must pay advance tax like other taxpayers if their liability exceeds ₹10,000 after TDS.
How should capital gains be included in advance tax computation?
Capital gains arising during the year should be included in the advance tax computation from the quarter in which they arise. Include the tax on capital gains in the remaining instalments after the gain occurs. No Section 234C interest is charged for shortfall in earlier instalments attributable to capital gains not yet earned. For instance, capital gains in October should be included in the December and March instalments.
How do I pay advance tax online?
Visit the Income Tax e-filing portal (eportal.incometax.gov.in), navigate to e-Pay Tax, select Challan ITNS 280, choose AY 2026-27, select payment type “Advance Tax (100)”, and pay via net banking, debit card, UPI, or NEFT/RTGS. Save the challan receipt with BSR code and serial number — you will need these details when filing your ITR.
Can I revise my advance tax estimates during the year?
Yes. Advance tax is based on estimated income, and estimates can be freely revised. If your income increases, pay more in subsequent instalments. If it decreases, reduce subsequent payments. There is no formal revision process — simply adjust the next instalment amount. The key is to ensure cumulative payments meet the minimum percentage thresholds at each due date to avoid Section 234C interest.
What happens if I pay more advance tax than my actual liability?
Excess advance tax (including excess TDS/TCS) is refunded upon processing of your income tax return. The Income Tax Department pays interest under Section 244A at 0.5% per month on the refund from 1 April of the assessment year to the date of granting refund. You must file your ITR to claim the refund — it is not automatic.
Do presumptive taxation assessees need to pay quarterly advance tax?
No. Assessees under presumptive taxation (Section 44AD for businesses with turnover up to ₹3 crore, and Section 44ADA for professionals with receipts up to ₹75 lakh) can pay the entire advance tax in a single instalment on or before 15 March. They are not required to pay in four quarterly instalments and no Section 234C interest is charged for missing the June, September, or December dates.
