September 15 advance tax deadline: Who needs to pay, how much and what penalty?

September 15 is almost here, which means taxpayers who are required to pay advance tax have just one more day to make the second instalment. The Income Tax Department has reminded taxpayers that the deadline for the advance tax instalment is September 15, 2026.

The department posted on X, urging taxpayers not to miss the deadline and to pay the second instalment of advance tax for Tax Year 2026–27 on time.

But does everyone have to pay advance tax? No. The requirement generally applies when your estimated tax liability for the year, after adjusting for tax deducted at source (TDS) and tax collected at source (TCS), is more than 10,000.HOW MUCH ADVANCE TAX NEEDS TO BE PAID BY SEPTEMBER 15?

Advance tax is not paid all at once. For most taxpayers, it is divided into four instalments during the year.

By June 15, at least 15% of the estimated advance tax should have been paid. The September 15 instalment takes the cumulative payment to at least 45%.

The next instalment is due by December 15, by which time at least 75% of the advance tax should have been paid. The remaining amount is payable by March 15, taking the total to 100%.

Any tax paid on or before March 31 is also treated as advance tax paid during the financial year.WHAT HAPPENS IF YOU MISS THE SEPTEMBER 15 DEADLINE?

Missing the deadline or paying less than the required amount can result in an interest charge.

Under the Income Tax Act, 2025, interest for deferment of advance tax is covered under Section 425, which corresponds to the earlier Section 234C. The interest is charged at 1% per month.

For the September instalment, the interest period is three months. So, if a taxpayer falls short of the required 45% cumulative payment, the interest could work out to around 3% of the shortfall.

There could also be another interest liability if the total advance tax paid during the year is less than 90% of the final tax liability. In such a case, interest under Section 424, corresponding to the earlier Section 234B, can apply at 1% per month from the beginning of the following tax year until the tax is paid.

For taxpayers who are liable to pay advance tax, making the September instalment on time can therefore help avoid an additional interest burden.- EndsPublished By: Jasmine anandPublished On: Sep 14, 2026 17:58 IST