Advance Tax Second Installment Deadline: How to Calculate and Pay by September 15

Published on: 8th Sep 2026

With September already underway, taxpayers in India need to mark their calendars for an important financial milestone. The advance tax second installment deadline for the Financial Year 2026-27 (Assessment Year 2027-28) is fast approaching on September 15, 2026. If your estimated tax liability for the year exceeds ?10,000 after accounting for Tax Deducted at Source (TDS) and Tax Collected at Source (TCS), paying this installment on time is crucial. Failing to meet this deadline can result in unnecessary interest penalties under the Income Tax Act. Here is a comprehensive guide to help you navigate the process smoothly. Scroll down to read more

Who is Liable to Pay Advance Tax?

Advance tax, often referred to as the 'pay-as-you-earn' scheme, applies to all taxpayers whose total tax liability in a financial year is ?10,000 or more after deducting TDS/TCS. This includes:

• Salaried Individuals: If you have significant income from other sources like rental income, capital gains, or interest on fixed deposits that is not fully covered by your employer's TDS.
• Self-Employed Professionals & Businesses: Freelancers, doctors, lawyers, and business owners must estimate their yearly income and pay tax in installments.
• Exemption for Senior Citizens: Senior citizens (aged 60 years or above) who do not have any income from business or profession are exempt from paying advance tax.

Understanding the Second Installment Breakdown

The Income Tax Department requires taxpayers to pay their advance tax in four distinct installments throughout the financial year. By the advance tax second installment deadline on September 15, 2026, you must have paid a cumulative total of 45% of your estimated tax liability.

Here is the complete schedule for quick reference:
* By June 15: 15% of the total tax liability
* By September 15 (Current Deadline): 45% of the total tax liability (minus what was paid in the first installment)
* By December 15: 75% of the total tax liability
* By March 15: 100% of the total tax liability

Note: Taxpayers who have opted for the presumptive taxation scheme under Section 44AD or 44ADA are exempt from these quarterly deadlines and can pay 100% of their advance tax in a single installment by March 15.

How to Calculate and Pay Your Advance Tax Online

Calculating your advance tax involves estimating your total income for the year and applying the relevant tax slabs. Follow these steps:

1. Estimate Gross Income: Add up your income from all sources (Salary, Business/Profession, Capital Gains, House Property, and Other Sources).
2. Claim Deductions: Subtract eligible deductions under Chapter VI-A (such as Section 80C, 80D, etc.) and any applicable exemptions.
3. Calculate Tax Payable: Compute the tax on this net income based on your chosen tax regime (Old vs. New Tax Regime).
4. Deduct TDS/TCS: Subtract any tax already deducted or collected at source.
5. Determine Advance Tax Due: If the remaining amount is ?10,000 or more, you must pay 45% of this figure by September 15.

To make the payment, log in to the Income Tax e-Filing portal, navigate to the 'e-Pay Tax' section, select the appropriate assessment year (AY 2027-28), and complete the payment securely using net banking, debit card, UPI, or RTGS/NEFT.

Consequences of Missing the September 15 Deadline

Delaying your payment past the advance tax second installment deadline can be costly. Under Section 234C of the Income Tax Act, a simple interest of 1% per month is charged on the shortfall amount for a period of three months.

Specifically, if your cumulative payment by September 15 is less than 36% of your total tax liability (allowing a small buffer from the 45% target), the 1% monthly interest will apply to the shortfalls. To protect your hard-earned money from being spent on avoidable penalties, it is highly recommended to calculate your dues and pay them well before the September 15 cutoff.

Meeting the advance tax second installment deadline on September 15, 2026, is a vital step in maintaining healthy financial hygiene and staying compliant with Indian tax laws. By taking a few minutes to estimate your income and pay your dues online today, you can avoid the stress of last-minute rushes and save yourself from costly interest penalties under Section 234C. Don't wait until the final day—calculate your liability and make your payment now!