Advance tax due 15 December 2026: who pays, how much and the interest

Advance tax is income tax paid during the year in which the income is earned, instead of in one go when you file the return. FY 2026-27 is the first year under the Income-tax Act, 2025, which calls it Tax Year 2026-27 (1 April 2026 to 31 March 2027) and renumbers the sections. The instalment dates, percentages and interest rates are the same as under the old Act. The next instalment is due on 15 December 2026.

Who has to pay

Salaried people often assume TDS covers everything. It does not cover interest on fixed deposits, rent, capital gains on shares or property, dividends or freelance income – this is where most advance-tax shortfalls come from.

Instalment schedule for Tax Year 2026-27

Interest if you pay short

Interest is simple interest at 1% per month or part of a month. The Income-tax Act, 2025 renumbers the provisions, but most practitioners still refer to them by their old numbers:

• Deferment of instalments (old Section 234C) – if cumulative payment by a due date is below the required percentage, 1% per month for three months on the shortfall (one month for the March instalment). No interest arises for June and September if you have paid at least 12% and 36%; there is no such margin for December.
• Default in advance tax (old Section 234B) – if advance tax paid by 31 March is less than 90% of the tax finally assessed, 1% per month on the shortfall from 1 April 2027 until the tax is paid.
• Income that arises later – for capital gains, lottery winnings or dividends that arise after an instalment date, no interest applies for the earlier instalments if the tax on them is paid in the remaining instalments.

Example: estimated tax for the year is ₹2,00,000 and ₹90,000 (45%) was paid by 15 September. By 15 December the cumulative requirement is ₹1,50,000 (75%). If nothing more is paid in December, interest on the ₹60,000 shortfall is ₹60,000 × 1% × 3 = ₹1,800, even if you make it good in March.

How to work out and pay the December instalment

• Re-estimate the full year's income – actual income to date plus a fair estimate to March, including salary, interest, rent, capital gains already booked and business profit.
• Deduct TDS/TCS – check Form 26AS and the AIS for tax already deducted or collected in your name.
• Compare the regimes – the new regime is the default; if you will choose the old regime, estimate on that basis.
• Pay online – on the e-filing portal use e-Pay Tax, select the Income-tax Act, 2025, choose Advance Tax for Tax Year 2026-27 and pay through the challan (CRN) generated.
• Keep the challan – note the BSR code, date and challan serial number; you will need them in the return.

Frequently asked questions