The annual tax-filing season can be very stressful, requiring significant time to gather documents and organise records. The good news is that paying advance tax is an efficient way to reduce this year-end pressure. This system lets you pay your tax liability in manageable quarterly instalments rather than a hefty lump-sum bill.
In this blog, we will decode what the 2026 advance tax is, how to calculate it and when to pay it online.
What is Advance Tax?
Advance tax is a “pay as you earn” scheme offered by the income tax department in which you pay your estimated taxes in four instalments rather than a large lump sum at the end of the fiscal year. These provisions of advance tax are covered under sections 403 to 410 of the Income Tax Act, 2025.
Advance tax payment facilitates timely collection and ensures stable revenue generation for the Government of India. It primarily applies to earnings generated outside a regular salary, including interest accrued on investments, capital gains, business profits, rental income from house property, and lottery winnings.
What are the Eligibility Criteria for the Advance Tax Payment?
According to the Income Tax Act, the primary eligibility criterion for advance tax applies to any taxpayer, including salaried employees, freelancers, and businesses whose total tax liability crosses ₹10,000 or more in a single financial year.
Senior citizens (aged 60 or older) without business income are entirely exempt from the advance tax payments. However, those with business earnings must pay. Also, those opting for the presumptive taxation scheme under Sections 44ADA and 44AD are also required to pay the full amount of their liability in a single instalment by March 15. In comparison, those under the Section 44AE presumptive scheme for specific businesses must distribute their advance tax payments across four standard instalments as per the dates.
What are the Advance Tax Payment Dates for FY26-27?
For the Financial Year 2026-27, eligible common taxpayers must pay their advance tax in four specific instalments throughout the year. The due advance tax percentages for FY 2026-27 are the following:
- Ordinary Taxpayers:
| Instalment | Due date | Percentage Payable |
| 1st Instalment | On or before June 15, 2026 | 15% of total tax liability |
| 2nd Instalment | On or before September 15, 2026 | 45% of total tax liability |
| 3rd Instalment | On or before December 15, 2026 | 75% of the total tax liability |
| 4th Instalment | On or before March 15, 2027 | 100% of total tax liability |
- Taxpayer Choosing the Presumptive Taxation Scheme under Sections 44AD and 44ADA
| Instalment | Due date | Percentage Payable |
| Single | On or before March 15, 2027 | 100% of Advance Tax |
How to Calculate Advance Tax Payments?
The process of calculating advance taxes is simple. It involves estimating your total income for the year, determining the tax payable, and distributing it across the scheduled due dates.
Here is the step-by-step process to calculate your advance tax liability:
- Estimate Your Gross Income: Add up your projected income from all sources for the financial year. This includes salary, business/professional profits, capital gains, rental income, and interest earnings.
- Deduct Allowable Expenses and Exemptions: Subtract any applicable business expenses or deductions under Chapter VI-A (such as Section 80C, also known as Section 123; and Section 80D, also known as Section 126) to arrive at your net taxable income.
- Compute Total Tax Liability: Calculate the tax due on this net income using the latest slab rates applicable for the assessment year.
- Subtract Tax Credits: Deduct any other tax credits already paid or deducted on your behalf (excluding TDS and TCS, as per your previous preference) to find your final net tax liability.
- Determine Advance Tax Applicability: If this final calculated tax liability is ₹10,000 or more, you are required to pay it in the prescribed quarterly instalments.
How to Make Advance Tax Payments Online?
Making your advance tax payments online is a seamless process that can be completed directly through the official e-filing portal of the Income Tax Department of India.
You can securely clear your dues using either of the two step-by-step methods detailed below:
Payment via Post-Login (Recommended)
- Visit the official income tax e-filing portal and click on ‘Login’ using your user ID (PAN) and password.
- From your main dashboard menu, choose e-File, then e-Pay Tax.
- On the upper right of the page, click the New Payment button.
- Locate the Income Tax tile and click Proceed.
- Choose the relevant tax year (e.g., 2026-27) and choose the payment type (minor head) as advance tax (100), and then click on Continue.
- Provide the correct amount breakdown in the correct tax component fields and click Continue.
- Choose your preferred payment option (net banking, debit card, UPI, or payment gateway) and click “pay now” to execute the transaction.
Quick Payment via Pre-Login (Without Logging In)
- Log in to the income tax e-filing portal and click on the quick links available on the left side of the home page. Click e-Pay Tax.
- Enter your PAN, re-enter PAN to confirm, give a valid mobile number and click on Continue.
- Enter the 6-digit One-Time Password (OTP) sent to your mobile phone and click Continue.
- After your identity is confirmed, click Proceed in the Income Tax tile.
- Choose the correct tax year and select advance tax (100) as your payment type. Continue.
- Fill in your calculated tax breakdown details, pick a payment method/bank, review the summary, and click Pay Now.
Read More: Income Tax Slabs 2026-27
What are the Income Tax Slab Rates for the Fiscal Year 2026-27?
The income tax slab rates for the financial year 2026-27 (assessment year 2027-28) depend on whether you choose the new tax regime (which is the default) or the old tax regime.
Here are the complete slab structures for individuals:
- New Tax Regime
| Income Slab | Tax Rate |
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 to ₹8,00,000 | 5% above ₹ 4,00,000 |
| ₹8,00,001 to ₹12,00,000 | ₹ 20,000 + 10% above ₹ 8,00,000 |
| ₹12,00,001 to ₹16,00,000 | ₹ 60,000 + 15% above ₹ 12,00,000 |
| ₹16,00,001 to ₹20,00,000 | ₹ 1,20,000 + 20% above ₹ 16,00,000 |
| ₹20,00,001 to ₹24,00,000 | ₹ 2,00,000 + 25% above ₹ 20,00,000 |
| Above ₹2,400,000 | ₹ 3,00,000 + 30% above ₹ 24,00,000 |
- Old Tax Regime
| Income Slab | Tax Rate |
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 to ₹5,00,000 | 5% above ₹ 2,50,000 |
| ₹5,00,001 to ₹10,00,000 | ₹ 12,500 + 20% above₹ 5,00,000 |
| Above ₹10,00,000 | ₹ 1,12,500 + 30% above₹ 10,00,000 |
Conclusion
Effectively managing advance tax ensures seamless financial operations and helps businesses avoid late-payment penalties. Handling these quarterly cash flows requires strategic capital management.
We at LendingKart offer ideal financing alternatives for MSMEs and freelancers looking to bridge cash gaps during tax seasons. With collateral-free business loans up to ₹50 lakhs and swift 3-day fund disbursals, we provide tailored working capital solutions to keep your enterprise agile and compliant.
FAQs
- How to Pay Advance Taxes Online?
To pay online, visit the official income tax e-Filing portal. You can log in and go to e-File, then e-Pay Tax, and finally New Payment, or you can use the quick e-Pay Tax link on the homepage. Select the correct assessment year, choose advance tax (100), fill in your breakdown, and pay via net banking, debit card, or UPI.
- Are there any Penalties or Interest Charges for failing to Pay Advance Tax?
Failing to pay advance tax triggers interest penalties under the Income Tax Act. Section 234C charges 1% per month simple interest on quarterly instalment shortfalls, while Section 234B applies 1% per month if 90% of the total tax isn’t paid by March 31st.
- Is it Mandatory for Taxpayers to Pay Advance Tax?
Yes, paying advance tax is compulsory if your total tax liability after deducting Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) amounts to ₹10,000 or more in a financial year. This rule is applicable to all taxpayers, including salaried persons, freelancers and businesses. The exception is only in the case of senior citizens (persons aged 60 years or above) who do not earn any income from a business or profession.
- What are the Steps Involved in Calculating Advance Tax Payments?
First, you must calculate your total gross income from all sources for the fiscal year. Subtract eligible business expenses, deductions, and exemptions to find your net taxable income. Calculate tax payable as per applicable slab rates. Deduct TDS/TCS, if any. If the remaining liability is ₹10,000 or more, advance tax applies.
- What are the Final Deadlines for Making Advance Tax Payments during the Financial Year 2026-27?
For FY 2026-27, you have to clear the entire advance tax liability by the last date of March 15, 2027. The previous quarterly due dates for the payment of your cumulative tax percentages are June 15, 2026 (15%), September 15, 2026 (45%), and December 15, 2026 (75%).
