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Income Tax · Glossary

Advance Tax

Income tax paid in quarterly instalments during the financial year itself — before filing the ITR.

Updated 2026-10-08Source: Income-tax Act · CGST Act · CBDT/CBIC

What it means

Advance tax is due when your estimated tax for the year is Rs. 10,000 or more (Section 208 of the Income Tax Act, 1961; s.404 of the Income-tax Act 2025 for tax year 2026-27). You pay it in four instalments during the year rather than in a lump sum at filing time. The schedule for tax year 2026-27 (s.408(1)):

- 15% by 15 June 2026
- 45% by 15 September 2026
- 75% by 15 December 2026
- 100% by 15 March 2027

Single-instalment exception: if you declare presumptive income (s.58, formerly 44AD/44ADA), you may pay the whole amount by 15 March (s.408(2); Section 211(1)(b) under the 1961 Act). Instalment shortfalls attract interest under s.425 (formerly 234C) — 3% of the shortfall for each of the first three instalments, 1% for March — and paying less than 90% overall attracts s.424 (formerly 234B) interest from 1 April after the tax year.

A worked example

Arjun, a software developer on the presumptive scheme (s.58, formerly 44ADA), has Rs. 30L gross receipts → Rs. 15L deemed profit, so his tax for 2026-27 is Rs. 1,09,200 including cess, less any TDS his clients deducted. As a presumptive taxpayer he may pay all of it by 15 March 2027 — no June/Sep/Dec instalments required.

Estimate your advance tax liability conservatively using the first-half receipts — overpaying is refunded at ITR with 6% interest under Section 244A. Paying less than 90% of assessed tax triggers 234B interest (s.424 from tax year 2026-27) from 1 April after the year ends.

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Look up the details

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Sources

Income-tax entries cite the Income-tax Act 1961, which governs FY 2025–26 (the return filed in 2026); from tax year 2026–27 the Income-tax Act 2025 applies, with new section numbers shown where we give them. GST law is unchanged. General information, not tax advice; verify with your CA before you file.

Related terms

Income Tax

Section 234B Interest

Interest payable when advance tax paid is less than 90% of assessed tax.Income Tax

Section 234C Interest

Interest on shortfall in any of the four advance tax instalments.Income Tax

Section 44ADA

Presumptive taxation scheme for specified professionals — 50% of gross receipts is deemed profit.ITR

ITR-4 (Sugam)

Income tax return form for individuals on presumptive taxation (44AD/44ADA/44AE).

Compliance without the vocabulary

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HourSlip works out the GST on each invoice, logs every TDS deduction and estimates your advance-tax instalments — you check the numbers, and the glossary stays optional.

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