It’s a cash-flow test for some today. June 15 is the first cut-off for FY 2026-27 and if you let it slip by, you will be on the hook for 1% monthly interest on whatever is short. If your tax comes to Rs 10,000 or more once TDS and TCS are factored in, 15% is due now. Otherwise, you risk a pricier tab down the line.
Investor risk and opportunity today
If you are in equities or mutual funds, there are two sides to the coin: you put off the pain but then you have to deal with the interest and a heftier lump sum later. The advance tax system is there to ease that burden, provided you are on top of it from the start.
The run-of-show for FY27 is simple enough. Put 15% in by June 15, get to 45% by the 15th of September, 75% by mid-December and 100% by March 15. It is a pay-as-you-earn model for the kind of income TDS doesn’t fully account for.
Say you have a windfall come in mid-year; there is some leeway for that. Taxpayers with unanticipated income like capital gains can make up for it in later instalments and, depending on how you handle the timing and disclosure, you might get some relief. But don’t count on it to wipe out interest on what you should have paid earlier. You still have to be on the ball.
Who must act and who is exempt
Per Section 403 of the 2025 Act (it was 207 in the 1961 one), you are in for an advance tax if your numbers show a liability of over Rs 10,000 after TDS and TCS. That means salaried folks with a few other income sources and those whose earnings are not even all year round.
The Income Tax Department has a list of who they are looking at: the consultants, the freelancers, the business owners, and anyone with a sizeable dividend or interest to report. Sell some stock or property and you may have to pay up in the same year. Firms and partnerships need to do their sums and pay in.
The senior citizen rule
Then there is the 60-and-over crowd. If you are a resident with no business or professional income, you are off the hook for instalment payments. You can just put in the full amount in one go before you file your ITR.
That doesn’t apply to non-residents, or to any resident with a side of business, or to anyone under 60. And if you are a self-employed pro operating under the presumptive scheme in Section 58A, you will be making your advance tax payment as well.
What if you miss June 15
You won’t see a set fine for missing today’s mark, but the interest will. One per cent a month is what you can expect to be charged on the difference for any late or incomplete instalment.
There are a couple of clauses that will add to the cost for those who are slow to pay. Section 234C brings in 1% simple interest for every quarterly instalment you let go. And if you haven’t put in at least 90% of what is assessed by year’s end, Section 234B comes into play.
‘Should your total for the year fall short of 90% of the assessed liability, you can look at 1% a month under 234B, running from April 1 of the assessment year to the day you finally make good on it. “You have to put 3% on the table for every quarter you miss, or 1% if it’s the last one, on whatever is short,” says Amitabh Lara, Executive Director at Anand Rathi Wealth.
And don’t think you can just make up for it in a later quarter and be done with it. Under Section 234C, that interest from before will keep ticking. It adds up, and by year-end you’re looking at steeper outflows and some cash flow pressure, which is the last thing an investor wants when they’ve been sitting on gains.
How to pay and what to look at first
The e-filing portal of the Income Tax Department is your best bet. It’s simple, but you have to be precise to stay off the radar of avoidable notices. Go through the official site, make sure you have the right year and tax head, then you can go ahead.
Here is the way to do it:
– Head to the income tax e-filing portal.
– Go to e-File > e-Pay Tax and put in a New Payment.
– You’ll want to choose Advance Tax under Income Tax.
– For the type, select Assessment Year 2026-27 and Minor Head Code 100.
– Put in your numbers for tax, surcharge and cess.
– Pick how you want to pay and confirm.
But before you authorise anything, run a quick check of your books. Reconcile your deductions and income so you don’t end up double-paying or coming up short.
Some things to cross-reference:
– Your AIS and Form 26AS to see what has been reported and any TDS.
– The usual like your salary slip, Form 16 and TDS forms.
– Any statements from your broker or bank for capital gains and interest.
– Records of rental, dividend or freelance work.
Why this is important for you
Think of advance tax as a way to keep your finances in order. If you are salaried and your TDS is in line, you won’t feel it. But mix in some capital gains, rent, FD interest or side-hustle money and that TDS cushion isn’t there. The instalment dates become non-negotiable.
A lot of people get it wrong because they only look at their salary or core business and let other income streams slide. Or they don’t update their figures after a bonus or a realised gain. That’s where you open yourself up to interest and a hit to your liquidity.
If you owe Rs 10,000 or more in FY27 once you factor in TDS and TCS, the rule is plain: 15% is due today. Most of us have four payments to make; senior citizens with no business income can do it in one go before they file.
It’s not a penalty, per se, but a matter of timing. Let an instalment go and you’re on the hook for 1% a month. And if your total advance tax doesn’t hit 90% of what you finally owe, you’ll be paying even more. It’s a drag on your returns that you can put a number on.
For those who have made some money of late, you can make amends in the next few instalments and there may be some leeway depending on how you report it. But the law is the law and past due amounts will still draw interest.
From here on in, it’s a numbers game. By September 15 you need to be at 45%, 75% by December 15, and 100% come March 15. If you get your house in order now and match your estimates to your AIS and 26AS, the rest of the year is just a formality.
In the end, it’s about strategy. Get it done on time and you don’t have to worry about interest eating into your pocket or dealing with arrears when you should be thinking about where to put your money.
