Advance Tax Deadline: Missed Your First Installment? Check How Interest Can Add To Your Tax Bill

With the September 15 advance tax deadline approaching, taxpayers with income that is not fully covered by TDS need to check whether they have paid enough tax so far in FY 2026-27. The second advance tax installment requires cumulative payment of 45 per cent of the estimated annual tax liability by September 15.

But what if the first installment, which was due on June 15, was missed? Missing the June deadline does not prevent a taxpayer from making that payment now. However, the delay can have an interest implication, and the September installment still needs to be accounted for.

Advance tax is paid in installments during the financial year instead of paying the entire tax liability at the end of the year. For FY 2026-27, the prescribed cumulative payment schedule is: The September 15 requirement is therefore not an additional 45 per cent on top of the June payment.

It means that the total advance tax paid by that date should reach 45 per cent of the estimated liability, after accounting for taxes already paid. Also Read : Stock Market Closed Tomorrow: Investors, Here's Why NSE And BSE Will Not Trade On September 14 A missed June payment can still be made.

Taxpayers do not have to wait until the September deadline or the end of the financial year to clear the earlier installment. Consider a taxpayer whose estimated advance tax liability for FY 2026-27 is Rs 1 lakh. The June installment would have been Rs 15,000, representing 15 per cent of the total liability.

If the taxpayer did not pay this amount in June, they can still pay the Rs 15,000, along with any applicable interest. By September 15, the cumulative advance tax payment should reach Rs 45,000. In this example, that means the taxpayer would need to have paid a total of Rs 45,000 by the September deadline, including the Rs 15,000 June installment.

The missed June payment therefore does not mean the September installment can simply be ignored. The requirement applies to taxpayers whose net tax liability, after taking into account TDS, TCS and available tax credits, is Rs 10,000 or more.

This can affect people who have income from sources beyond their regular salary or income on which sufficient tax has already been deducted. Freelancers and consultants may have to pay advance tax, as may individuals earning rental income.

Salaried taxpayers can also fall within its scope if they have additional income that is not adequately covered by TDS, including profits from the sale of stocks, cryptocurrency gains or rental income. There is no additional penalty merely because an advance tax installment was not paid by its due date.

However, taxpayers can face interest on a shortfall. Under Section 234C, interest is charged at 1 per cent per month on the applicable shortfall when advance tax is not paid according to the prescribed installment schedule.

Niresh Maheshwari, Director, Wealth Wisdom India Pvt Ltd, said that even a delay of a few days can result in interest for one month because a fraction of a month is treated as a full month for tax calculation.