Quick answer: By 15 December 2026 you should have paid at least 75% of your estimated tax for tax year 2026-27, after counting TDS. This matters to salaried people only if they have income their employer's TDS does not cover, such as rent, interest, capital gains or freelance fees, and the uncovered tax is ₹10,000 or more. Each shortfall attracts simple interest of 1% a month for three months under section 425 of the Income-tax Act, 2025 (the old section 234C). If your extra income is regular, you can instead declare it to your employer on Form 122 and let salary TDS absorb it.
Most salaried employees never think about advance tax, because their employer deducts tax from every salary. That stops being enough when you earn rent, a large amount of interest, or a capital gain from selling shares or mutual funds during the year. This guide shows who needs to pay by 15 December, how to work out the amount, what a missed instalment actually costs, and two ways salaried people can avoid the problem altogether.
The rules for tax year 2026-27
Last updated: 3 November 2026. This is the first year under the Income-tax Act, 2025. The rules are the same as before; only the section numbers have changed.
| Rule | Position | Section (old section) |
|---|---|---|
| Who must pay | Anyone whose tax for the year, after TDS and TCS, is ₹10,000 or more | 404 (208) |
| Exempt | Resident senior citizens aged 60 or more with no business or professional income | 403 (207) |
| Instalments | 15% by 15 June, 45% by 15 September, 75% by 15 December, 100% by 15 March, all cumulative | 408 (211) |
| Interest on a missed instalment | 1% a month on the shortfall, for three months (one month for March) | 425 (234C) |
| Interest on a year-end shortfall | 1% a month if advance tax and TDS together are below 90% of final tax, from 1 April until paid | 424 (234B) |
Two reliefs are worth knowing. There is no interest for June if at least 12% was paid, or for September if at least 36% was paid. And tax on capital gains, lottery winnings, dividends and first-time business income does not have to be paid for instalments that fell before the income arose, provided it is paid in the remaining instalments or by 31 March.
Advance tax for income earned up to 31 March 2026 stayed under the old 1961 Act. Everything earned from 1 April 2026, which is what the 15 December instalment covers, falls under the 2025 Act.
Do you need to pay? A two-minute check
- 1. List your other incomeRent, savings and FD interest, dividends, capital gains realised so far, freelance or consulting fees. Salary alone is covered by your employer's TDS.
- 2. Estimate the tax on itAdd the other income to your taxable salary and work out the extra tax at your slab rate, or at the special rate for capital gains. Add 4% cess.
- 3. Subtract tax already deductedTake away TDS on that income, such as TDS your bank deducted on interest. Check your Annual Information Statement and Form 168, the renamed Form 26AS.
- 4. Compare with ₹10,000If the balance is ₹10,000 or more for the year, advance tax applies to you. Below that, settle it when you file your return.
If you are not sure whether your employer has the full picture, the income tax calculator shows your total tax for the year, and the TDS on salary calculator shows what your employer should be deducting.
Worked example: salary, rent and a capital gain
Assumptions: salary of ₹18 lakh under the new tax regime, so taxable salary after the ₹75,000 standard deduction is ₹17,25,000, with the employer's TDS fully covering tax on salary. A flat let out at ₹25,000 a month, with no TDS by the tenant. Shares held for under a year sold in October 2026 at a short-term gain of ₹1,00,000. No advance tax paid so far.
| Item | Calculation | Amount |
|---|---|---|
| Rent for the year | ₹25,000 × 12 | ₹3,00,000 |
| Taxable rent after 30% standard deduction | ₹3,00,000 × 70% | ₹2,10,000 |
| Tax on rent | Falls in the 20% slab, plus 4% cess | ₹43,680 |
| Tax on short-term gain | ₹1,00,000 × 20%, plus 4% cess | ₹20,800 |
| Total advance tax for the year | ₹43,680 + ₹20,800 | ₹64,480 |
| Due by 15 December | 75% of ₹64,480 | ₹48,360 |
| Balance by 15 March | ₹64,480 − ₹48,360 | ₹16,120 |
What the delay has already cost. Because the rent was known from the start of the year, 15% of its tax was due in June and 45% in September. The capital gain arose in October, so its tax was not needed for those two dates.
| Instalment | Required | Paid | Interest (1% × 3 months) |
|---|---|---|---|
| 15 June | ₹6,552 (15% of tax on rent) | Nil | ₹195 |
| 15 September | ₹19,656 (45% of tax on rent) | Nil | ₹588 |
| 15 December, if paid | ₹48,360 | ₹48,360 | Nil |
| 15 December, if missed | ₹48,360 | Nil | ₹1,449 more |
Interest is worked on the shortfall rounded down to the nearest ₹100. The ₹783 for June and September is already fixed; paying ₹48,360 by 15 December stops a further ₹1,449 being added. Slab rates and the 20% rate on short-term gains from listed shares are as applicable for tax year 2026-27; check your own figures with the income tax calculator before paying.
The salaried shortcut: declare other income on Form 122
Under the 2025 Act, an employee can give the employer details of income from other employers, income under other heads and tax already deducted or collected on it. The form for this is Form 122, under section 392(4)(a), which replaces the old Forms 12B and 12BAA, according to the Income Tax Department's FAQ on Form 122. The employer then takes that information into account when deducting salary TDS.
- Works well for regular income such as rent or interest, because the employer can spread the extra tax over the remaining salary months.
- Less suited to a one-off capital gain late in the year, because the remaining months may not absorb it. Many people pay advance tax directly for that part.
- It can still cut interest now. Under the interest rules, carried over from the old Act, each instalment is measured on your tax after the whole year's TDS. Extra salary TDS that your employer deducts between now and March therefore shrinks the base for every instalment, including those already past. It only helps if the employer actually deducts the extra by March.
Ask your payroll team how they handle Form 122. HR teams can use the same form to help employees with rental income avoid interest, and to collect previous-employer salary from new joiners.
How to pay advance tax online
- 1. Open e-Pay TaxOn the income tax e-filing portal, choose e-Pay Tax. You can log in or use the quick link with PAN and OTP.
- 2. Choose the 2025 ActSelect Income Tax, then the Income Tax Act, 2025 and tax year 2026-27. Payments for earlier years stay under the 1961 Act.
- 3. Pick Advance Tax (100)Not Self-Assessment Tax (300). A wrong code is the most common mistake.
- 4. Pay and save the challanPay by net banking, UPI, card or NEFT/RTGS. Keep the challan reference number, BSR code and challan serial number for your return.
Mistakes in the tax year or the payment type can be corrected through the portal's challan correction facility within a limited period, so check the challan as soon as you pay.
Estimate your tax for the year in a minute. Use the free income tax calculator, or check your employer's deduction with the TDS on salary calculator. No app, no download, no login.
Frequently asked questions
I only have salary. Do I need to pay advance tax?
Usually not. Your employer deducts TDS on salary, and if that covers your tax, advance tax does not apply. It becomes relevant when other income pushes your uncovered tax to ₹10,000 or more.
I missed June and September. Is it worth paying now?
Yes. Interest for June and September is already fixed, but paying 75% by 15 December stops a further three months of interest on the December shortfall and reduces the year-end interest under section 424.
I am a pensioner over 60. Do I pay advance tax?
Not if you are resident in India and have no business or professional income. Any tax due can be paid as self-assessment tax before filing your return.
What if I pay more than I need?
The excess is refunded after you file your return, with interest. Overpaying avoids interest charges but ties up money until the refund arrives.
Related: understanding TDS deduction on salary, old vs new tax regime with examples and how to calculate income tax on salary.
Position as of 3 November 2026. Sources: Income-tax Act, 2025, sections 403 to 408, 424 and 425 as summarised in practitioner guidance; Income Tax Department FAQ on Form 122. The worked example uses stated assumptions and is for illustration; your tax depends on your full income, regime and deductions. General information, not tax advice; for significant amounts, consult a chartered accountant.