Advance tax: the 15 September instalment and how to estimate it
Anyone whose tax for the year after TDS exceeds ₹10,000 must pay advance tax, and 45% of the year's estimate is due by 15 September 2026. Companies, LLPs, freelancers and salaried people with other income are all covered. Presumptive taxpayers under 44AD and 44ADA pay once, by 15 March.
Who pays and how much
Advance tax applies to every taxpayer whose liability for the year, after TDS and TCS, is ₹10,000 or more. The schedule is cumulative: 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March. Resident senior citizens without business income are exempt. Taxpayers using presumptive schemes under Section 44AD or 44ADA pay the whole amount in one instalment by 15 March. This is the first year under the Income-tax Act 2025, which applies from 1 April 2026 and calls the period a tax year; the instalment dates are unchanged.
How to estimate the September instalment
Take profit to 31 August from the books, add a reasonable estimate for the rest of the year, and apply the applicable rate: 25% for most domestic companies (or 22% under Section 115BAA), 30% for LLPs and firms, and slab rates for individuals. Deduct TDS already suffered and any first instalment paid, then pay so that 45% of the full-year estimate is covered. Overestimating is not penalised; underestimating costs 1% per month under Section 234C on the shortfall for three months, and 1% per month under 234B from April if less than 90% is paid by March. Pay online through the income tax portal with challan ITNS 280 (or the equivalent under the new Act) and keep the challan for the return.
Common misses
Freelancers who receive fees with 10% TDS assume they are covered, but at higher incomes the slab rate exceeds 10% and the balance is due as advance tax. Companies in their first year forget that capital gains on investments and interest on fixed deposits count. Founders who took a salary and also received dividends or sold shares owe advance tax on the non-salary income. Our Income Tax service prepares the estimate each quarter so the instalment is a number, not a guess.