Advance tax dates and what it costs if you miss them

Advance tax applies to anyone whose tax for the year, after TDS, is more than ₹10,000. That covers most salaried people with side income, consultants and small businesses. Resident senior citizens (60 and above) with no business or professional income do not need to pay advance tax.

The four payment dates

• 15 June: pay 15% of your estimated tax for the year
• 15 September: 45% in total
• 15 December: 75% in total
• 15 March: 100%

If you use presumptive taxation (44AD or 44ADA), you can pay the full amount in one instalment by 15 March.

What happens if you miss

Interest is charged at 1% a month, as simple interest, on the shortfall for each instalment: for three months on each of the June, September and December instalments, and for one month on the March instalment. If you pay less than 90% of your tax by 31 March, further interest of 1% a month runs from April until you pay.

There is one real exception. If part of your income is capital gains or dividends that arose after an instalment date, you are not charged interest for not paying tax on it earlier, as long as you pay it in the remaining instalments.

How to estimate

For salaried people with steady income, your employer's TDS usually covers most of your tax. You mainly need advance tax for income like interest, rent, capital gains or freelance fees. A simple estimate: expected income for the year, tax at your rates, minus TDS, split across the four dates.

These interest rules are in sections 234B and 234C of the Income-tax Act, 1961. From tax year 2026-27 the Income-tax Act, 2025 applies, with the same instalment dates and new section numbers.

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