Synopsis: People who have other sources of income apart from their job may have to pay some of their taxes early by June 15, 2026. If they do not pay by this date they will have to pay extra money as an interest charge. So it is important for taxpayers to know who must pay and what to pay.
The advance tax is something people forget about until it is almost too late. It is really important for taxpayers to think about it so they do not have to pay a lot of taxes at the end of the year. The advance tax is due on June 15, for the payment so people should look at how much money they have coming in and how much tax they owe.
What Is Advance Tax and Why Is It Paid?
The Advance tax is also known as the pay as you earn system. This system is pretty simple, people pay their income tax in parts throughout the year. They do not have to make one payment at the end of the year which really helps them because they do not have to pay a lot of money at once when they file their income tax returns. The government also benefits from the Advance tax system as they get taxes every month instead of waiting for the whole year to get over. People usually have to pay Advance tax when their estimated tax liability is more than ₹10,000. This is after they have subtracted the tax that was already deducted from their income and other tax credits they’re eligible for.
Who Must Pay Advance Tax in 2026?
The advance tax is for people who will have to pay more than ₹10,000 in taxes for the year including people who work on their own like doctors, lawyers, business owners, consultants ,landlords that earn rental income and investors who make money from selling shares or property and earn interest income from bonds & FDs also have to pay advance tax. Even people who get a salary might have to pay advance tax if they get money that is not fully covered by TDS. For example if someone gets a salary but also gets money from renting out a house they might have to pay advance tax if they have to pay more than ₹10,000 in taxes.
Who Can Skip Advance Tax Payments?
Not every person who pays tax has to pay advance tax, senior citizens who are 60 years old or more and do not earn money from a business or job are usually not required to pay advance tax.The same applies to people whose employer or others deduct all their tax through TDS, this means many people who get a salary may not have to worry about paying advance tax.
How Much Should You Pay by June 15?
June 15 is the deadline for the advance tax instalment for the financial year.People who have to pay advance tax need to pay 15% of the estimated tax for the year by this date.
Let’s say, your estimated tax liability for FY 2026-27 is ₹1 lakh then, you would need to pay ₹15,000 by June 15. The cumulative tax paid should increase to ₹45,000 by September 15, ₹75,000 by December 15 and the full ₹1 lakh by March 15.
Penalty and Interest for Missing the Deadline
Missing the advance tax deadline does not mean you get a fixed fine, you have to pay interest because of Sections 234B and 234C of the Income Tax Act. These rules apply when you do not pay advance tax or pay less than you should by the date. If you delay tax payment the interest you owe will increase, people who miss payments will end up paying more than they originally owed, these sections levy 1% monthly penal interest for failing to pay or deferring mandatory advance tax throughout the financial year.
How to Calculate Your Tax Liability
To figure out advance tax you need to think about how much money you will make in total for the financial year. This means you should add up the money you get from your salary, any business income, freelancing income, rent you get from properties, interest from your savings, investments and any money you make from selling things, like shares, mutual funds or properties. After you add up all the money you make that is taxable you should see if you can get any deductions or exemptions. Then you need to subtract the taxes that are already taken out like TDS and any other taxes you have already paid. If you still have to pay more than ₹10,000 in taxes you might have to pay advance tax. For instance let us say you have to pay ₹80,000 in taxes in total and ₹60,000 is already taken out through TDS then you might have to pay the remaining ₹20,000 as advance tax.
How to Make the Payment Online
People who pay advance taxes can pay online through the Income Tax Department website.
- First you have to log in to the website, then you have to select the option that says e-Pay Tax and choose Advance Tax under Challan 280.
- Next you will have to enter the year you are paying taxes for, how much you’re paying and some other details.
- Then you can pay your taxes using your bank account on the internet, a debit card, UPI or any other way that the Income Tax Department approves.
When you are done paying your taxes you should get a receipt that shows you paid, save this receipt on your computer so you can use it later when you are filing your taxes.
Ways to Avoid Common Advance Tax Mistakes
Some common mistakes can lead to you paying less advance tax than you should and getting interest charges, so here are some things to remember :
- Don’t forget to count the interest you earn from fixed deposits and savings accounts.
- Make sure to include the rent you get from houses or shops you own.
- Think about the profit you make from selling shares, mutual funds or properties.
- You should check your Annual Information Statement and Form 26AS often.
- Try not to underestimate your yearly income.
- Pay your taxes a day before the deadline so you don’t have last-minute problems.
Conclusion
So in conclusion if you’re eligible to pay advance tax then, pay it on or before time,make sure do not undervalue your income and lastly learn about the different modes of payment through which you can pay for the advance tax.
Written by Shreya Tiwari
