Your third advance tax instalment for FY 2026-27 is due on 15 December 2026, and by that date you must have paid at least 75% of your estimated tax liability. Miss it and interest starts running — here is exactly how.
· Tax · 6 min read
The short version
If your estimated tax liability for FY 2026-27 is ₹10,000 or more after TDS, you must pay advance tax in four instalments across the year. The third one falls on 15 December 2026, and by that date you must have paid at least 75% of your total estimated tax for the year.
Miss that mark and you pay interest under Section 234C even if you settle the full amount before 31 March.
The FY 2026-27 instalment schedule
Advance tax is not four equal payments. It is a cumulative ladder, and this is where most people go wrong — they treat each quarter as 25% instead of the percentage below.
| Due date | Minimum cumulative tax paid |
|---|---|
| 15 June 2026 | 15% of estimated annual tax |
| 15 September 2026 | 45% of estimated annual tax |
| 15 December 2026 | 75% of estimated annual tax |
| 15 March 2027 | 100% of estimated annual tax |
So if you estimate ₹4,00,000 of tax for the year, your obligations are roughly ₹60,000 by June, ₹1,80,000 by September, ₹3,00,000 by 15 December, and the full ₹4,00,000 by 15 March.
Note the September instalment was due on 15 September 2026 — that date has already passed. If you underpaid then, the interest is already running and paying the December instalment will not undo it.
When advance tax applies to you
Advance tax is required when your total tax liability for the year, after TDS credits, is ₹10,000 or more. It is not based on your income — it is based on the tax actually payable.
You can usually skip advance tax if:
- Your employer already deducts TDS from your salary and it covers your full liability.
- Your total tax payable after TDS is under ₹10,000.
- You are a resident individual with no income from business or profession, apart from salary, whose total income is below the basic exemption limit.
If you are a freelancer, consultant or run a business, you almost certainly need to pay advance tax yourself. Nobody is deducting TDS from a client invoice the way an employer does.
TDS and TCS credits only count if the income is real
This one catches a lot of people. You can reduce your advance tax liability by expected TDS and TCS credits, but only when both of these are true:
- The income on which that TDS or TCS will be deducted has been included in your estimate of taxable income for the year.
- The tax has actually been deducted or collected by the time you pay the instalment.
So if you expect ₹50,000 of TDS but the client has not actually deducted it by 15 December, you cannot reduce your December payment by that ₹50,000. Assuming credits that never materialise is the single most common cause of a Section 234C bill.
What it costs to get it wrong
Two sections apply, and they are easy to confuse:
- Section 234C — interest at 1% per month for three months on the shortfall in any instalment. If you underpaid by ₹1,00,000 at the December deadline, that is roughly ₹1,000 per month for up to three months.
- Section 234B — interest at 1% per month on tax that should have been paid by 31 March but was paid later. This one runs from the start of the assessment year until you actually pay, so it is the expensive one to trigger.
The good news is that paying the shortfall before the due date stops the 234C clock. If you realise you are short for December, paying the difference before 15 December costs nothing. Paying it on 20 December still costs you, because the month has partly elapsed.
How to work out your December number
- Estimate your total taxable income for the whole of FY 2026-27.
- Work out the tax on it, including cess.
- Subtract the TDS and TCS actually deducted so far.
- Compare what you have already paid against the 75% mark.
- Pay the difference before 15 December 2026.
If step 4 leaves you short, use the Advance Tax Calculator to see the instalment split and the interest on a shortfall.
Frequently Asked Questions
What happens if I did not pay any advance tax until December? You are liable for 234C interest on the shortfall in each missed instalment, and 234B interest on any tax not paid by 31 March. Paying the full amount before 31 March limits the damage; paying after that month starts the more expensive 234B clock.
Can I revise my estimate mid-year? Yes. You are expected to revise your estimate if your income changes materially during the year. The revised estimate becomes the basis for the remaining instalments.
Is advance tax the same as paying my full tax early? No. Advance tax is an estimate paid across the year against expected liability. The final figure is settled when you file your return, and any excess paid becomes a refund.
Does advance tax apply if I am a salaried employee with a side income? It depends. If your employer TDS covers your salary liability and your total tax payable after all credits stays under ₹10,000, you are exempt. A significant side income or freelance income usually breaks that exemption.
Where do I pay it? Through your bank, or online via the Income Tax e-filing portal using challan 2800 for advance tax. Paying by cheque to the bank also works.
Plan for December now, not in the middle of it
The 15 December 2026 deadline is the second-largest advance tax checkpoint of the year, and it is the one that catches people who treated the September payment as the last one. Work out your 75% figure during November, while the money can still be moved without interest attaching to it.