Advance Tax Due Date December 2026: 3rd Instalment Calculation in Punjab

Reviewed by Kinsmen Corporate Advisory Group · Published 10 November 2026

Quick Answer (Executive Summary):
The statutory deadline to deposit the third instalment of Advance Tax for Financial Year 2026–27 is 15 December 2026. By this date, companies, partnership firms, and individuals with a net annual tax liability exceeding ₹10,000 must have paid at least 75% of their total projected tax liability. Failing to meet the 75% benchmark attracts mandatory interest of 1% per month for three months under the advance tax interest rule (old Section 234C of the Income-tax Act, 1961, carried into the Income-tax Act, 2025).

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Key Takeaways

• Due Date: 15 December 2026 is the non-negotiable cut-off for the 3rd advance tax tranche.
• 75% Cumulative Benchmark: Payments made across June, September, and December must reach at least 75% of net tax liability.
• ₹10,000 Threshold: Applies to all taxpayers whose estimated annual tax after TDS/TCS credits exceeds ₹10,000.
• Presumptive Tax Relief: Small businesses under Section 44AD and professionals under Section 44ADA are exempt from December; they pay 100% by 15 March 2027.
• Senior Citizen Exemption: Resident senior citizens (60+) without business income are legally exempt under Section 207(2).
• Section 234C Penal Interest: Underpaying the 75% target attracts mandatory interest of 1% per month for 3 months on the shortfall.

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Advance Tax Schedule & Percentage Milestones for FY 2026-27

Under Section 208 and Section 211 of the Income-tax Act, advance tax is structured into four progressive quarterly instalments:

Instalment Tranche	Due Date for FY 2026–27	Minimum Cumulative Tax Payable	Governing Interest Section
1st Instalment	15 June 2026	15% of estimated net tax liability	Section 234C (1% for 3 months)
2nd Instalment	15 September 2026	36% (safe harbor) or 45% of net tax	Section 234C (1% for 3 months)
3rd Instalment	15 December 2026	75% of estimated net tax liability	Section 234C (1% for 3 months)
4th Instalment	15 March 2027	100% of estimated net tax liability	Section 234C (1% for 1 month)

Note: For the 15 December instalment, there is no safe harbor percentage; you must meet the full 75% threshold to prevent penal interest.

To structure your payments accurately, explore our Advance Tax Calculation service desk.

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Who Must Pay Advance Tax, and Who Is Legally Exempt?

                     [Is Estimated Net Tax Liability > ₹10,000?]
                                         |
                       -------------------------------------
                       |                                   |
                      NO                                  YES
                       |                                   |
                Advance Tax NOT Required             Check Status
                                                           |
                    -----------------------------------------------------------------
                    |                               |                               |
             Resident Senior                 Presumptive Scheme              Regular Individual,
            Citizen (Age 60+)              u/s 44AD / 44ADA / 44AE             Firm, LLP, Company
            (No Business Inc)                       |                               |
                    |                         EXEMPT from Dec 15;             MANDATORY 75%
             FULLY EXEMPT                       Pay 100% by                    PAYMENT DUE
            from Advance Tax                   15 March 2027                  15 Dec 2026

1. Salaried Individuals

Salaried employees whose employers deduct full tax under Section 392 of the Income-tax Act, 2025 (old Section 192) generally do not need to pay advance tax. However, if they have additional income—such as rental income, capital gains from mutual funds, or substantial savings interest—that causes net unpaid tax to exceed ₹10,000, they must pay advance tax independently.

2. Presumptive Taxation Taxpayers (Section 44AD / 44ADA)

Traders declaring 8% or 6% profit under Section 44AD, and professionals declaring 50% profit under Section 44ADA, are exempt from the June, September, and December tranches. They pay their entire 100% advance tax liability in a single payment on or before 15 March 2027.

3. Resident Senior Citizens (Section 207(2))

An individual who is a resident of India, is 60 years or older at any time during the financial year, and does not derive any profits from a business or profession, is completely exempt from advance tax.

Review corporate planning structures on our Corporate Tax Planning desk.

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How to Calculate 3rd Instalment Advance Tax: Practical Example

Here is a practical calculation for a manufacturing partnership firm in Ludhiana for FY 2026–27:

Step	Computation Parameter	Amount (₹)
1	Estimated Gross Annual Turnover (FY 2026–27)	₹2,50,00,000
2	Projected Net Business Profit (after depreciation & partner salary)	₹32,00,000
3	Gross Tax Liability on Firm Profit (at flat 30%)	₹9,60,000
4	Add: Health and Education Cess (4%)	₹38,400
5	Total Estimated Tax Payable	₹9,98,400
6	Less: TDS Credits Deducted by Customers (reflected in AIS/26AS)	₹(2,20,000)
7	Net Tax Liability for the Year	₹7,78,400
8	75% Cumulative Advance Tax Due by 15 Dec 2026 (75% of ₹7,78,400)	₹5,83,800
9	Less: Advance Tax Already Paid (Instalment 1 & 2 in June/Sept)	₹(2,80,000)
10	Net Balance Amount to Deposit on or before 15 December 2026	₹3,03,800

If the firm only deposits ₹2,00,000 by 15 December, it will face a shortfall of ₹1,03,800, attracting Section 234C interest at 1% per month for 3 months (₹1,03,800 × 1% × 3 = ₹3,114).

If you trade in derivatives, read our F&O Taxation & Advance Tax Guide.

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Understanding Section 234C and Section 234B Interest Penalties

The Income-tax Act enforces advance tax discipline through two distinct interest mechanisms:

1. Section 234C (Deferment of Advance Tax)

• Applicability: Triggered if payments in any quarterly instalment fall below the mandatory threshold (15%, 36%, 75%, or 100%).
• Interest Rate: Fixed at 1% per month simple interest.
• Duration: Charged for a mandatory period of 3 months for the June, September, and December instalments, and 1 month for the March instalment.

2. Section 234B (Default in Payment of Advance Tax)

• Applicability: Triggered if total advance tax paid across the entire financial year is less than 90% of the assessed tax.
• Interest Rate: Charged at 1% per month on the shortfall.
• Duration: Runs from 1 April of the assessment year until the date of regular return filing or self-assessment tax payment.

Transition Under the Income-tax Act, 2025:

Under the Income-tax Act, 2025 (in force from 1 April 2026), the same 1% per month rates carry over. Old Section 234B maps to Section 424 and old Section 234C to Section 425 in most published concordance tables; confirm the numbering against the CBDT mapping on incometax.gov.in before quoting it in notices or replies.

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Step-by-Step Payment Procedure via e-Pay Tax

To ensure your advance tax payment is credited accurately to Assessment Year 2027–28:

1. Step 1: Access e-Filing Portal
   Visit incometax.gov.in. Navigate to Quick Links > e-Pay Tax.
2. Step 2: Enter PAN and Mobile OTP
   Enter your 10-digit PAN, confirm PAN, and input your mobile number to receive a verification OTP.
3. Step 3: Select Assessment Year
   Select Assessment Year 2027–28 (which corresponds to Financial Year 2026–27).
4. Step 4: Select Type of Payment
   Choose Advance Tax (100) as the minor head of payment. Do not select Self-Assessment Tax (300), which is only valid after 31 March 2027.
5. Step 5: Enter Tax Breakup
   Input the net advance tax sum under the “Tax” column. Surcharge, education cess, and interest calculations are consolidated.
6. Step 6: Pay via Net Banking / RTGS / UPI
   Select payment gateway, net banking, or NEFT/RTGS mandate. Complete transaction and download the official payment challan receipt containing the BSR Code, Challan No, and CIN.

For broader direct tax planning, consult our Income Tax Return Filing Desk.

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Local Punjab Advisory: Ludhiana, Patiala, Mohali & Amargarh

Different regional economic sectors in Punjab face distinct advance tax estimation considerations:

• Ludhiana Hosiery & Auto Parts Manufacturers: Export orders and domestic festival sales peak between October and December. Revenue estimates must incorporate seasonal post-monsoon receipts and input tax reconciliations.
• Patiala & Nabha Agro-Machinery Dealers: Combine harvester and tractor equipment fabricators must account for seasonal harvest receipts, factoring in customer financing remittances.
• Mohali IT Startups & SaaS Providers: Tech enterprises receiving software development exports must reconcile foreign exchange gains/losses under Section 43A and deduct applicable Section 80-IAC holiday exemptions.
• Amargarh & Malerkotla Commercial Traders: Grain merchants and cold storage operators should ensure unbilled dami commission is estimated conservative to prevent interest exposure.

Kinsmen Corporate Services advises clients across Ludhiana, Patiala, Mohali, and Amargarh from our registered office.

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Frequently Asked Questions

What is the advance tax due date for the third instalment of FY 2026-27?

The statutory due date for the third instalment of advance tax for Financial Year 2026–27 (Assessment Year 2027–28) is 15 December 2026. By this date, all corporate entities and non-presumptive taxpayers must pay at least 75% of their total estimated net income tax liability.

Who is legally required to pay advance tax by 15 December 2026?

Every corporate entity, partnership firm, LLP, and individual whose estimated net tax liability for the financial year (after deducting TDS and TCS) exceeds ₹10,000 must pay advance tax. Individuals operating under presumptive taxation (Section 44AD or 44ADA) pay 100% in a single instalment by 15 March 2027.

How is interest calculated under Section 234C if I underpay on 15 December?

Under Section 234C of the Income-tax Act, if advance tax paid on or before 15 December 2026 is less than 75% of the total assessed tax, interest is charged at the rate of 1% per month for a mandatory period of 3 months on the shortfall between the amount paid and 75% of the tax due.

Are senior citizens exempt from paying advance tax on 15 December?

Yes. Under Section 207(2) of the Income-tax Act, resident senior citizens aged 60 years or above who do not derive any income from business or profession are completely exempt from paying advance tax. They can pay their entire tax liability as self-assessment tax at the time of filing their ITR.

How should share market and F&O derivative traders compute advance tax by 15 December?

Traders must calculate net realized capital gains and F&O derivative trading profits booked up to 30 November 2026, estimating December turnover. Unanticipated windfall capital gains realized after 15 December can be discharged in the subsequent 15 March instalment without incurring retroactive Section 234C interest.

Can advance tax be paid after 15 December 2026?

Yes. Any tax deposited on or before 31 March 2027 is treated as advance tax. However, paying after 15 December results in mandatory 1% per month penal interest under Section 234C for the intervening period.

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Official Government Portals & Statutory Sources

• Income Tax Department e-Filing Portal: incometax.gov.in — e-Pay Tax payment service and advance tax liability calculator.
• Central Board of Direct Taxes (CBDT): incometaxindia.gov.in — Advance tax circulars, Section 208–211 rules, and safe harbor notifications.
• Protean (NSDL) Challan Inquiries: protean-tinpan.com — Verification of CIN and Challan ITNS 280 tax credits.

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Calculate Your Advance Tax with Kinsmen

Do not overpay or incur Section 234C penal interest. Contact our direct tax advisory desk in Amargarh to compute your accurate 75% advance tax liability before 15 December 2026.

• Direct Phone: +91 99143-14949
• WhatsApp Inquiry: Direct WhatsApp Consultation
• Office Location: Shop No. 1, Nabha Malerkotla Road, Amargarh – 148022, District Malerkotla, Punjab
• Online Form: Request an Advance Tax Computation via Contact Desk