Updated: November 2026 · By the Tax Team at R. D. Jain & Associates
For Financial Year 2026–27, advance tax compliance has entered a new statutory era. The Income Tax Act, 2025 — effective from 1 April 2026 — has replaced the Income Tax Act, 1961, and renumbered the provisions governing advance tax. While the mechanics remain familiar, taxpayers and professionals must update their references to the new sections to avoid procedural errors.
This guide walks through who must pay advance tax, the revised statutory framework, due dates for FY 2026–27, and the complete step-by-step procedure to pay advance tax through the Income Tax e-Filing Portal.
1. Who Must Pay Advance Tax?
Under Section 404 of the Income Tax Act, 2025, any assessee whose estimated tax liability for the financial year, after reducing TDS and TCS credits, is ₹10,000 or more is required to pay advance tax in instalments during the year. This threshold has remained unchanged from the previous regime.
This obligation applies broadly to:
- Salaried individuals with non-salary income (interest, capital gains, rental income, freelance earnings)
- Self-employed professionals (doctors, lawyers, consultants, architects)
- Business owners — sole proprietors, partnership firms, LLPs, and companies
- Investors with significant capital gains
- NRIs earning India-source income above the threshold
Exemption for Senior Citizens
Resident senior citizens (aged 60 years and above) who do not have any income chargeable under the head “Profits and Gains of Business or Profession” are exempt from advance tax. Senior citizens earning business or professional income remain liable.
2. Due Dates for FY 2026–27
Advance tax for FY 2026–27 must be paid in four cumulative instalments:
| Instalment | Due Date | Cumulative % of Total Tax |
|---|---|---|
| 1st | 15 June 2026 | 15% |
| 2nd | 15 September 2026 | 45% |
| 3rd | 15 December 2026 | 75% |
| 4th | 15 March 2027 | 100% |
Note for Presumptive Taxpayers: Assessees opting for the presumptive taxation scheme — Section 44AD (small businesses up to ₹3 crore turnover) and Section 44ADA (specified professionals up to ₹75 lakh gross receipts) under the Income Tax Act 2025’s equivalent provisions — may discharge the entire advance tax liability in a single instalment on or before 15 March 2027.
3. Consequences of Default — Interest under Sections 424 and 425
Failure to pay advance tax, or shortfall in payment, attracts mandatory simple interest:
- Section 424 — Interest @ 1% per month or part of month, levied on the shortfall in total advance tax paid by the end of the financial year
- Section 425 — Interest @ 1% per month for deferment of instalments below the prescribed cumulative percentages
However, no interest under Section 425 shall be levied if at least 12% of total tax is paid by the first instalment and 36% by the second instalment. This carve-out helps taxpayers whose income estimation improves during the year.
4. Step-by-Step Procedure to Pay Advance Tax Online
The Income Tax Department has launched a new Integrated Payment Module on the e-filing portal that supports payments under both the Income Tax Act, 1961 (for FY 2025-26 obligations) and the Income Tax Act, 2025 (for FY 2026-27 onwards) from a single interface.
Step 1 — Visit the e-Filing Portal
Go to incometax.gov.in. You may proceed either by logging in with your PAN as User ID, or by using the “e-Pay Tax” option under “Quick Links” without login.
[SCREENSHOT 1: Homepage of incometax.gov.in showing Login button and Quick Links section]
Step 2 — Navigate to e-Pay Tax
After login, click on the e-File menu in the top navigation and select e-Pay Tax from the dropdown.
[SCREENSHOT 2: Top navigation showing e-File menu expanded with e-Pay Tax option]
Step 3 — Initiate New Payment
On the e-Pay Tax landing page, click the “New Payment” button on the top right corner.
[SCREENSHOT 3: e-Pay Tax landing page with New Payment button highlighted]
Step 4 — Select Payment Type
From the list of payment categories, locate “Income Tax” (which covers advance tax and self-assessment tax) and click “Proceed”.
[SCREENSHOT 4: Payment type selection screen with multiple categories]
Step 5 — Choose Tax Year and Type
This is the most important step under the new regime. Carefully select:
- Tax Year: 2026-27 (for advance tax on income earned between April 2026 and March 2027 — governed by the Income Tax Act, 2025)
- Minor Head: Advance Tax (Code 100)
[SCREENSHOT 5: Tax Year and Minor Head selection screen]
Step 6 — Enter Tax Components
Enter the tax amount under each applicable head:
- Income Tax (basic tax)
- Surcharge (if applicable based on income slab)
- Health and Education Cess (4% on tax + surcharge)
- Interest (under Sections 424/425, if voluntarily paying)
- Other (if applicable)
The portal will display the total amount payable.
[SCREENSHOT 6: Tax component entry screen showing breakdown fields]
Step 7 — Choose Payment Mode
Select your preferred mode of payment:
- Net Banking — Directly through your bank’s net banking platform
- Debit Card — Authorised banks
- Pay at Bank Counter — Generate challan and pay at any authorised bank branch
- RTGS / NEFT — Through any bank
- Payment Gateway — UPI, credit cards, and other digital modes
Click “Pay Now”.
[SCREENSHOT 7: Payment mode selection screen]
Step 8 — Complete Payment & Download Challan
Read and accept the terms and conditions. Complete the transaction through your chosen mode. Upon successful payment, an electronically generated Challan Counterfoil with the Challan Identification Number (CIN) is displayed and emailed to your registered email.
Save this challan. The CIN (Challan Identification Number) is essential — it appears in your Form 26AS / AIS within 3 to 7 working days and serves as proof of payment.
[SCREENSHOT 8: Sample challan counterfoil with CIN highlighted]
5. Verifying Credit in Form 26AS / AIS
After 3–7 working days from payment:
- Log into incometax.gov.in
- Go to Services → AIS (Annual Information Statement) or Form 26AS
- Verify that the advance tax payment appears under the “Tax Paid” section
- Cross-check the CIN, BSR Code, date of deposit, and amount
If the payment does not reflect within 7 working days, raise a grievance through the e-Nivaran portal with the challan details.
6. Common Errors and How to Avoid Them
| Error | Consequence | How to Avoid |
|---|---|---|
| Wrong Assessment Year / Tax Year selected | Credit reflects in wrong year — refund or rectification required | Verify Tax Year vs AY based on the financial year of income |
| Wrong Minor Head (Self-Assessment instead of Advance Tax) | Treated as self-assessment, interest under Section 424 may still apply | Select Code 100 — Advance Tax |
| Missing instalment dates | Interest under Section 425 — deferment of instalments | Mark calendar reminders 7 days before each due date |
| Underestimating capital gains income | Shortfall in advance tax — interest applies | Re-estimate after each capital gains event and adjust next instalment |
7. Frequently Asked Questions
Q1. Can I pay advance tax in one lump sum instead of four instalments?
Yes, but you may attract interest under Section 425 for deferment of earlier instalments. Presumptive taxpayers under Section 44AD / 44ADA equivalent may pay in one instalment by 15 March without attracting interest.
Q2. What if my income estimate changes during the year?
Re-estimate your liability and pay the required cumulative percentage by the next instalment date. The portal allows multiple payments throughout the year.
Q3. Is advance tax applicable on capital gains?
Yes. However, advance tax on capital gains arising after a particular instalment date can be paid in the next instalment without attracting interest under Section 425 — subject to specific conditions.
Q4. Can I pay advance tax without logging in?
Yes. Use the “e-Pay Tax” option under the “Quick Links” section on the homepage. You will need to enter your PAN and verify with an OTP to proceed.
Q5. Will I receive any acknowledgement?
Yes. The Challan Counterfoil with CIN is generated immediately and emailed to your registered email ID. Always save a copy for your records.
Conclusion
Advance tax under the Income Tax Act, 2025 continues the familiar “pay-as-you-earn” principle while updating section numbers and procedural references. The transition to the new Integrated Payment Module on incometax.gov.in has streamlined the process for taxpayers handling both legacy (1961 Act) and new (2025 Act) obligations.
For taxpayers with complex income structures — multiple income sources, capital gains, presumptive income, foreign income — a careful estimation exercise before each due date can save significant interest costs. Professional advice helps optimise the timing and amount of each instalment, particularly where income is uneven or unpredictable.
Need assistance with your advance tax computation?
The Direct Taxation team at R. D. Jain & Associates assists individual taxpayers, professionals, and businesses with advance tax planning, computation, and timely payment. Reach out for a professional consultation.
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Disclaimer: This article is intended for informational purposes only and does not constitute professional advice. Section references, due dates, and procedures are based on the Income Tax Act, 2025 as in force on the date of publication. Readers are advised to consult their tax advisor or refer to official notifications for case-specific advice. R. D. Jain & Associates assumes no responsibility for actions taken based on this content.