Advance Tax September 15 deadline is important for taxpayers who earn income from sources such as interest, dividends, stock market investments or freelancing.
The second instalment of advance tax for FY 2026-27 is due today, September 15.
Taxpayers who are required to pay advance tax should ensure that the required amount is deposited on time. Missing the deadline or paying less than the required amount can result in interest charges.
Advance Tax September 15 Deadline Explained
Advance tax is a system under which taxpayers pay their estimated income tax during the financial year instead of paying the entire amount while filing their annual ITR.
Under the rules mentioned in the source, taxpayers generally pay advance tax in four instalments based on their estimated annual tax liability.
The instalment schedule is 15% by June 15, 45% by September 15, 75% by December 15 and 100% by March 15.
Who Has to Pay Advance Tax
Advance tax is generally applicable when a taxpayer’s estimated annual tax liability, after adjusting TDS and TCS, is ₹10,000 or more.
This can include salaried individuals with additional income, freelancers, business owners and senior citizens who have taxable income. The source notes an exception for senior citizens who do not have business income.
Taxpayers with income from bank deposits, shares, dividends, freelancing or other sources should estimate their total tax liability after considering TDS and TCS.
Interest for Missing the September Deadline
If the required 45% of total estimated tax has not been paid by September 15, interest can apply under Section 234C. The interest is stated to be 1% per month for three months, resulting in a total of 3% on the applicable shortfall.
According to Manish Mishra, co-founder and CEO of GenZCFO, taxpayers get some relief if they have paid at least 36% of their total tax liability by September 15.
In that situation, the source says no interest is charged even though the 45% target has not been reached.
If the payment is below 36%, interest is calculated on the amount needed to reach the 45% instalment requirement, according to the explanation provided in the source.
Section 234B can also become relevant when the total advance tax paid during the year is less than 90% of the final tax liability. In such a case, additional interest at 1% per month may apply from April 1 of the following year.
How Stock Market and FD Income Is Treated
Income from capital gains and dividends can affect advance tax calculations. If a taxpayer earns profits from shares or property after the June instalment and before September, the tax on that income can be included while calculating the September instalment.
The source also advises taxpayers to check their Annual Information Statement, or AIS, for income such as interest earned from fixed deposits and savings accounts. This can help them include such income while estimating their tax liability.
What to Do If You Missed the Deadline
Taxpayers who have missed the September 15 deadline or paid less than required should not wait until the December instalment to correct the shortfall.
According to Rahul Charkha, partner at Economic Laws Practice, taxpayers should first recalculate their estimated annual tax liability after adjusting the TDS already deducted.
They should then pay the outstanding amount through the applicable advance tax or self-assessment tax challan as soon as possible. Paying earlier can help reduce the additional interest burden.
Taxpayers should also keep the next deadlines in mind. The target is to have paid at least 75% of the estimated tax by December 15 and the full amount by March 15.
It is advisable to reassess income before each advance tax instalment, particularly when income comes from freelancing, fixed deposits, dividends or share trading. Checking the AIS can also help identify additional income that needs to be considered.
