Advance Tax AY 2026-27 – Due Dates, New Sections 403-410 & Calculation

Advance Tax AY 2026-27 – New Law, Due Dates, Sections 403-410, Interest & Full Example

Advance tax rules have changed under the Income Tax Act, 2025 effective from 1 April 2026. The provisions are now covered under Sections 403 to 410. Taxpayers whose estimated tax liability exceeds ₹10,000 must generally pay tax during the year in installments.

This updated guide explains Advance Tax for FY 2026-27, due dates, applicability, calculation, interest under the new law, and a practical example.

Table of Contents

• What is Advance Tax
• Advance Tax Due Dates FY 2026-27
• Who Must Pay Advance Tax
• Who is Exempt
• Presumptive Taxation Rule
• Step-by-Step Calculation
• Advance Tax Example
• Interest for Non-Payment
• Interest for Short Payment
• How to Pay Advance Tax Online
• Common Mistakes
• Advance Tax vs Self Assessment Tax
• What You Learn from This Article
• Conclusion

What is Advance Tax (New Law)

Advance tax is income tax paid during the financial year in installments instead of paying the full amount at the time of filing the return.

Under Section 404, any taxpayer whose estimated tax liability exceeds ₹10,000 must pay advance tax. This can apply to individuals, businesses, freelancers, and professionals.

Key point: If your total tax liability after reducing TDS and TCS is more than ₹10,000, advance tax may become applicable.

Advance Tax Due Dates FY 2026-27 (AY 2027-28)

Installment	Due Date	Minimum Cumulative Payment
1st Installment	15 June 2026	15%
2nd Installment	15 September 2026	45%
3rd Installment	15 December 2026	75%
4th Installment	15 March 2027	100%

You may also pay tax by 31 March 2027, but interest consequences depend on the timing and the applicable section.

Who Must Pay Advance Tax

You may need to pay advance tax if you have:

• Business income
• Professional income
• Freelance income
• Capital gains
• Interest income
• Rental income
• Dividend income
• Crypto profit
• Salary plus additional income

Even if TDS is deducted, advance tax may still be payable if the balance tax exceeds ₹10,000.

Who is Exempt

Advance tax is generally not required if:

• Total tax liability is below ₹10,000
• Senior citizen aged 60 or above does not have business income
• Entire tax liability is covered by TDS or TCS

Important: Senior citizens with business income may still be required to pay advance tax.

Presumptive Taxation Advance Tax Rule

Taxpayers opting for:

• Section 44AD
• Section 44ADA

must generally pay 100% advance tax by 15 March 2027.

Payment up to 31 March 2027 is still treated as paid during the financial year, but interest treatment should be checked carefully.

Step-by-Step Advance Tax Calculation

1. Estimate total income for the year
2. Reduce eligible deductions
3. Calculate income tax liability
4. Add cess and surcharge, if applicable
5. Reduce TDS and TCS already available
6. The balance is advance tax payable

Advance Tax Payable = Total Tax Liability + Cess/Surcharge - TDS/TCS

Normal installment pattern:

• June: 15%
• September: 45%
• December: 75%
• March: 100%

Advance Tax Example (Updated)

Professional receipts = ₹20,00,000

Expenses = ₹12,00,000

Net professional income = ₹8,00,000

Interest income = ₹10,000

Gross total income = ₹8,10,000

Less deductions:

• 80C (PPF + LIC) = ₹65,000
• 80D = ₹12,000

Total income = ₹7,33,000

Tax liability = ₹59,100

Cess = ₹2,364

Gross tax = ₹61,464

Less TDS = ₹30,000

Advance tax payable = ₹31,464

Installment	Amount
June	₹4,700
September	₹9,400
December	₹9,400
March	₹7,964

Interest for Non-Payment (Section 425)

Interest at 1% per month may be charged if:

• Less than 15% is paid by June
• Less than 45% is paid by September
• Less than 75% is paid by December
• Less than 100% is paid by March

Interest for Short Payment (Section 424)

If 90% of total tax is not paid before 31 March, interest at 1% per month may apply until the outstanding tax is paid.

Paying advance tax on time helps avoid interest and keeps tax compliance smoother.

How to Pay Advance Tax Online

Method 1 – With Login

1. Go to the Income Tax portal
2. Click e-File and then e-Pay Tax
3. Select New Payment
4. Choose Income Tax
5. Select AY 2027-28 for FY 2026-27 advance tax
6. Choose Minor Head 100 (Advance Tax)
7. Enter the amount
8. Pay via UPI, net banking, or available modes

Method 2 – Without Login

• Go to e-Pay Tax
• Enter PAN
• Verify through OTP
• Select AY 2027-28
• Choose Advance Tax (100)
• Pay the amount

Important: For FY 2026-27, the correct assessment year for advance tax payment is AY 2027-28.

Common Mistakes

• Paying only in March without tracking earlier installments
• Ignoring interest income
• Not adjusting TDS correctly
• Choosing the wrong assessment year
• Missing capital gains tax
• Not revising income estimate during the year

Advance Tax vs Self Assessment Tax

Advance Tax	Self Assessment Tax
Paid during the year	Paid after year end
Helps avoid interest exposure	Interest may apply if paid late
Usually 4 installments	Usually one-time payment
Used for tax planning	Used to clear final balance before return filing

What You Learn from This Article

• Advance tax provisions under new law Sections 403 to 410
• Updated due dates for FY 2026-27
• Presumptive taxation advance tax rule
• Calculation with practical example
• Interest under Section 424 and Section 425
• Step-by-step payment process

Conclusion

Advance tax is mandatory when tax liability exceeds ₹10,000. Under the Income Tax Act, 2025, taxpayers should carefully track installment due dates, estimate annual income properly, and pay on time to reduce interest exposure.

Proper planning and timely payment make return filing smoother and reduce last-minute tax pressure.

Disclaimer: This article is for educational purposes only. Please verify the latest legal provisions or consult a tax professional before taking any action.