Advance Tax Due Dates India 2025-26 and How to Avoid the 1% Monthly Penalty
Published 30 June 2026 · Tax & Salary
Suraj is a software engineer in Bengaluru. In July 2025 he sold equity shares and realised a capital gain of ₹60,000 — his first time trading stocks beyond his regular salary. He did not know what advance tax was. He found out in March 2026 when his CA mentioned it before ITR filing. By then, three quarterly deadlines had passed. Here is what that cost him.
The Four Advance Tax Due Dates for FY 2025-26
| Due Date | Cumulative % to Pay | Remaining After |
|---|---|---|
| 15 June 2025 | 15% | 85% |
| 15 September 2025 | 45% | 55% |
| 15 December 2025 | 75% | 25% |
| 15 March 2026 | 100% | 0% |
These are cumulative percentages. "45% by September" does not mean you pay 45% in September — it means you should have paid 45% total by then, including the 15% from June.
Suraj's Penalty for Missing All Three Deadlines
Capital gains tax liability for Suraj's ₹60,000 gain = ₹60,000 (assuming STCG at 20% = ₹12,000; let us say his total advance tax liability from capital gains and other sources rounds to ₹60,000 for this illustration).
Under Section 234C, the penalty is 1% per month on the shortfall at each due date. Suraj paid nothing by June, September, or December — and paid everything in March.
June shortfall: 15% of ₹60,000 = ₹9,000 not paid. Penalty accrues for 3 months (June, July, August) = ₹9,000 × 1% × 3 = ₹270
September shortfall: 45% cumulative = ₹27,000 not paid. Penalty for 3 months = ₹27,000 × 1% × 3 = ₹810
December shortfall: 75% cumulative = ₹45,000 not paid. Penalty for 3 months = ₹45,000 × 1% × 3 = ₹1,350
Total Section 234C interest: ₹270 + ₹810 + ₹1,350 = ₹2,430. Not catastrophic for ₹60,000 in tax — but entirely avoidable.
Who Needs to Actually Pay Advance Tax
Anyone whose total tax liability for the year is ₹10,000 or more after TDS. The threshold is low. A freelancer earning ₹5L in project income with no TDS easily clears it. A salaried employee with ₹2L in rental income may clear it. A trader with ₹80,000 in short-term capital gains will clear it.
Pure salaried employees whose only income is salary — and whose employer TDS is accurate — rarely owe advance tax on their own. The moment any non-salary income appears (dividends above ₹5,000, bank FD interest, capital gains), the calculation changes.
How to Pay Advance Tax in India
Pay through Challan 280 on the Income Tax e-filing portal (incometaxindia.gov.in) or via net banking directly. Select "Advance Tax" as the payment type, Assessment Year 2026-27, and complete the payment with your bank. Save the challan receipt — you need it when filing your ITR.
Run this for your own numbers
Calculate Your Advance Tax →What Most People Get Wrong
They think advance tax only applies to business owners or the self-employed. A salaried employee who earns rental income, has capital gains from stock sales, or earns freelance project fees may owe advance tax on those specific amounts — even when employer TDS covers the salary portion perfectly. The advance tax obligation is on the gap between total tax liability and TDS, not on salary alone.
Frequently Asked Questions
What are the advance tax due dates for 2025-26?
15 June 2025: at least 15% of estimated tax. 15 September 2025: at least 45% cumulative. 15 December 2025: at least 75% cumulative. 15 March 2026: 100% of total estimated tax.
Who needs to pay advance tax in India?
Anyone whose total tax liability for the year is ₹10,000 or more after TDS must pay advance tax. This includes: salaried employees with significant capital gains or other income beyond salary, freelancers, business owners, and investors with dividend or trading income.
What is the penalty for not paying advance tax?
Section 234C: 1% per month on the shortfall at each due date (June, September, December, March). Section 234B: 1% per month if total advance tax paid is less than 90% of assessed tax, calculated from April 1 until the tax is paid. Section 234A: 1% per month for filing return late.
How do I pay advance tax in India?
Through Challan 280 on the Income Tax e-filing portal (incometaxindia.gov.in) or through net banking. Select "Advance Tax" as the type, Assessment Year 2026-27, and pay using your bank. Keep the challan receipt — it is needed when filing ITR.
Can salaried employees ignore advance tax?
Only if their tax is fully covered by employer TDS and total tax liability is under ₹10,000. If you have capital gains, rental income, freelance income, or interest income that takes total tax above ₹10,000 after TDS, you must pay advance tax by the due dates.
Do you have income beyond your salary TDS — capital gains, rent, or freelance — that could make your total tax liability exceed ₹10,000?