The first advance tax instalment for FY 2026-27 is due on 15 June 2026. Taxpayers whose estimated tax liability exceeds ₹10,000 after considering TDS and other tax credits must pay advance tax to avoid interest penalties.
Here are 5 important checks before making the payment:
1. Estimate Your Total Annual Income
Calculate income expected during FY 2026-27 from all sources, including:
- Salary
- Business or professional income
- Capital gains
- Rental income
- Interest from FDs, savings accounts, bonds, etc.
- Dividend income
A realistic estimate helps avoid underpayment and penalties later.
2. Adjust TDS, TCS and Other Tax Credits
Before calculating advance tax liability, deduct:
- TDS already deducted by employers or banks
- TCS credits
- Eligible tax reliefs and credits
Advance tax is payable only on the remaining tax liability.
3. Check Whether Advance Tax Applies to You
Advance tax is generally applicable if:
- Estimated tax liability exceeds ₹10,000
- You earn income beyond regular salary
- You are a freelancer, trader, investor, landlord, business owner, or professional
Senior citizens (60 years or above) who do not have business or professional income are generally exempt from advance tax requirements.
4. Pay the Correct First Instalment
Under advance tax provisions, taxpayers are required to pay:
| Due Date | Minimum Cumulative Tax Payable |
|---|---|
| 15 June 2026 | 15% |
| 15 September 2026 | 45% |
| 15 December 2026 | 75% |
| 15 March 2027 | 100% |
Ensure that at least 15% of the estimated annual tax liability is paid by 15 June.
5. Consider Recent Income or Capital Gains
If you have recently:
- Sold shares or mutual funds
- Sold property
- Earned significant business profits
- Received bonuses or large interest income
Reassess your tax estimate before paying. Many taxpayers underestimate tax liability because they overlook one-time gains.
What Happens if You Miss the Deadline?
Failure to pay advance tax or paying less than the required amount may attract:
- Interest under Section 424 (similar to old Section 234B)
- Interest under Section 425 (similar to old Section 234C)
The interest is generally charged at 1% per month on the shortfall amount.
Quick Checklist Before June 15
✅ Estimate total FY 2026-27 income
✅ Include capital gains and interest income
✅ Adjust TDS/TCS credits
✅ Verify if tax liability exceeds ₹10,000
✅ Pay at least 15% of annual tax liability
✅ Keep challan and payment acknowledgement safely
For investors with mutual funds, stocks, F&O trading, rental income, or business income, reviewing tax liability before the June 15 deadline can help avoid unnecessary interest costs later in the year.
Disclaimer:
This article is intended solely for educational and informational purposes. The securities or companies mentioned are provided as examples and should not be considered as recommendations. Nothing contained herein constitutes personal financial advice or investment recommendations. Readers are advised to conduct their own research and consult a qualified financial advisor before making any investment decisions.
Investments in securities markets are subject to market risks. Please read all related documents carefully before investing.
