Advance tax Q3 2026, 75% due 15 December.

FY 2026-27 advance tax instalments:

Who must pay advance tax:

• Any taxpayer with tax liability (after TDS/TCS credit) > INR 10,000 in the FY.
• Individuals, HUFs, firms, LLPs, companies - all applicable.
• Section 44AA presumptive income scheme: specific rules apply (see below).
• Senior citizens (60+ years) without business income are exempt from advance tax if their income is only from pension / interest / rent.

1. Estimate FY 2026-27 total income: salary + business + capital gain + other sources + any adjustments.
2. Compute estimated tax liability: at applicable slab rate (new regime default) + surcharge + cess + specific-section tax (115BBH VDA, 112A LTCG, 111A STCG, 115BAC concessional).
3. Reduce TDS / TCS already deducted: Form 26AS + AIS verification.
4. Net advance tax liability: estimated tax - TDS/TCS - any Section 90/91 Foreign Tax Credit.
5. Q3 cumulative requirement: 75% of net advance tax liability.
6. Q3 payment due: Q3 cumulative requirement - advance tax already paid in Q1 (15%) + Q2 (45% = 30% incremental).

Payment method: Challan ITNS 280, Code 100 (Advance Tax). Via online banking, debit card, UPI, net banking, or at designated bank branches. Keep Challan Identification Number (CIN) for reconciliation.

Section 234B (Interest for default in payment of advance tax):

• If taxpayer has not paid at least 90% of total assessed tax (after TDS) as advance tax, 1% per month simple interest from April 1 to date of regular assessment.

Section 234C (Interest for deferment of advance tax):

• If 15% of advance tax not paid by 15 June: 1% per month for 3 months on shortfall.
• If 45% not paid by 15 September: 1% per month for 3 months on shortfall.
• If 75% not paid by 15 December: 1% per month for 3 months on shortfall.
• If 100% not paid by 15 March: 1% per month for 1 month on shortfall.

Combined, missing Q3 can cost 3-4% effective annual interest on the shortfall. For large advance tax liabilities (INR crore+), interest costs are material.

• Section 44AD (small business): presumptive 8% / 6% deemed profit. Advance tax: can be paid in SINGLE instalment on 15 March of FY. No Q1 / Q2 / Q3 obligation.
• Section 44ADA (specified professionals): presumptive 50% deemed profit on gross receipts up to INR 75 lakh (95%+ digital receipts). Same single-instalment relief: pay by 15 March. See freelancer tax.
• Section 44BB / 44BBB (specific sectors): oil + gas, non-resident shipping. Specific rules.
• Section 44ABB: hotels + restaurants. Specific rules.

If presumptive-scheme taxpayer OPTS OUT, standard four-instalment advance tax applies.

• Under-estimating full-year income: year-end bonus / Diwali bonus / capital gain / rental income not reflected. Q3 payment inadequate → Section 234C interest.
• Missing TDS reconciliation: TDS reflected in Form 26AS but not in advance tax computation. Over-payment.
• Capital gain omission: realised in October / November but Q3 payment doesn't reflect. Section 234C interest.
• Section 115BBH (crypto) + Section 112A (equity LTCG) at specific rates not applied: 30% VDA + 12.5% LTCG not at slab.
• Foreign income taxable (resident status): foreign dividend / rental / capital gain not included. Especially relevant for NRIs who became residents during FY.
• Wrong Challan Code: Code 100 is Advance Tax; Code 300 is Self-Assessment Tax. Using wrong code causes credit mismatch.
• Missing CIN reconciliation: Challan Identification Number not reflected in Form 26AS. Follow-up with bank + CBDT for correction.

Last updated: 2026-10-22.