Introduction
The first instalment of advance tax for Tax Year 2026-27 falls on June 15, 2026 — a mandatory compliance under the new Income Tax Act, 2025 for every individual and entity whose tax liability for the year is expected to exceed ₹10,000.
Missing the advance tax deadline does not just mean a late payment — it triggers interest under Section 234B and 234C of the new Act, which can add 1% per month to your outstanding tax. For high-income individuals and businesses, this can run to significant amounts.
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Who Must Pay Advance Tax
Must pay:
Exempt from advance tax (but still file ITR):
Presumptive taxation (Section 44AD/44ADA) — special rule:
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Advance Tax Schedule — Ty 2026-27
Instalment Due Date Percentage of Tax Liability
1st June 15, 2026 15%
2nd September 15, 2026 45% (cumulative)
3rd December 15, 2026 75% (cumulative)
4th March 15, 2027 100% (cumulative)
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How To Calculate — Step By Step
Step 1: Estimate total income for TY 2026-27 Include: Salary, capital gains (STCG/LTCG), business income, rental income, interest income, dividends
Step 2: Deduct applicable deductions (if in old regime) Standard deduction (₹50,000 old regime), 80C (up to ₹1.5L), 80D, HRA exemption etc.
Step 3: Apply slab rates New regime: Use new Act slabs (₹0–4L: nil; ₹4–8L: 5%; ₹8–12L: 10% etc.) Old regime: Use old Act slabs with surcharge and cess
Step 4: Deduct TDS already deducted/expected Your employer's TDS for the year (from Form 16 / salary declaration)
Step 5: Result = Annual Tax Liability If this is > ₹10,000, you must pay advance tax.
Step 6: June 15 payment = 15% of annual liability Pay through incometax.gov.in → "e-Pay Tax" → Challan 280 (ITNS 280)
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Practical Example — Capital Gains Scenario
Income Source Amount
Salary (employer deducting TDS) ₹18,00,000
LTCG from equity mutual funds ₹5,00,000 (above ₹1.25L threshold)
STCG from stocks (sold in April 2026) ₹2,00,000
Total additional income (beyond salary) ₹7,00,000
Tax on LTCG (12.5% on ₹3,75,000 above exemption): ₹46,875 Tax on STCG (20%): ₹40,000 Total additional tax liability: ~₹87,000
Since ₹87,000 > ₹10,000 → advance tax required. June 15 payment: 15% of ₹87,000 = ₹13,050
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Common Mistakes To Avoid
1. Not paying on capital gains — many investors think TDS on mutual fund redemptions covers everything. It doesn't — check your Form 26AS
2. Using AY instead of TY reference — new challan system references "Tax Year 2026-27" not "Assessment Year"
3. Not accounting for crypto or F&O income — both attract tax; F&O losses also require proper accounting
4. Waiting for March — Section 234C interest applies separately to each missed instalment, not just the final March payment
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