Taxpayers whose tax liability exceeds Rs 10,000 in a financial year must pay the first instalment of advance tax for FY 2026-27 by today evening, June 15, 2026, to avoid interest charges under the Income-tax
Act.
Advance tax is the system of paying income tax in instalments during the financial year instead of making a lump-sum payment while filing the income tax return. The requirement applies when the total tax payable after adjusting tax deducted at source (TDS) exceeds Rs 10,000.
Who needs to pay advance tax?
While advance tax is generally associated with businesses and self-employed professionals, salaried individuals may also be required to pay it if they earn income that is not fully covered by TDS.
This may include income from capital gains, rental earnings, bank interest, dividends, freelance assignments, or any other source where sufficient tax has not been deducted.
Tax experts say salaried taxpayers should estimate tax liability on such additional income and pay advance tax during the year if the total tax payable exceeds Rs 10,000.
What freelancers and professionals should know
For freelancers, consultants and professionals, advance tax compliance is particularly important as a large part of their income may not be subject to TDS.
Those opting for the presumptive taxation scheme enjoy a simplified process and can pay their entire advance tax liability in a single instalment by March 15 instead of following the quarterly schedule.
From April 1, 2025, the TDS threshold under Section 194J was increased from Rs 30,000 to Rs 50,000. As a result, many professionals may receive payments without TDS deductions, making advance tax payments even more important.
Senior citizens exempt
Resident senior citizens who do not earn income from business or profession are exempt from paying advance tax.
Even if they earn interest from fixed deposits, savings accounts or dividends, they can pay the applicable tax while filing their income tax return and are not required to make advance tax payments during the year.
Advance tax payment schedule
Taxpayers are required to pay advance tax in four instalments during the financial year:
- 15% of estimated tax liability — by June 15
- 45% of estimated tax liability — by September 15
- 75% of estimated tax liability — by December 15
- 100% of estimated tax liability — by March 15
What happens if you miss the deadline?
Missing an advance tax instalment does not attract any direct penalty. However, taxpayers may have to pay interest under Sections 234B and 234C of the Income-tax Act for delayed or insufficient payments.
A taxpayer who fails to pay the required amount by the due date may be charged simple interest at 1% per month on the shortfall. The interest liability can increase the overall tax burden even if the tax is eventually paid later.
Taxpayers who miss an instalment can still make the payment in subsequent instalments or clear the entire outstanding amount before March 15, but interest for the delay may still apply.
Things to check before paying
Before making an advance tax payment, taxpayers should review all sources of income that may not be covered by TDS, including capital gains, interest income, rental receipts and freelance earnings.
Experts also recommend checking details available in Form 26AS and the Annual Information Statement (AIS) to ensure accurate tax calculations. While generating the challan on the income tax portal, taxpayers should carefully select the correct assessment year and payment category to avoid processing issues.
