Guide
Advance Tax Q4 for FY 2026-27: 100 Percent by 15 March 2027
Last reviewed: May 2026 · Sourced from official government portals
What The Q4 Instalment Represents
Q4 cumulative target is 100 percent of assessed annual tax. By 15 March 2027, your total advance tax payment for FY 2026-27 should equal your full annual tax liability (with TDS and TCS credits applied). Q4 is the last chance to top up before Section 424 annual underpayment interest kicks in from 1 April 2027.
Why Q4 Is The Most Important Instalment
Two reasons. First, the Section 424 rule is binary: if total advance tax payment is below 90 percent of assessed tax, the full year's 424 interest accrues from 1 April. If you're at 90 percent or above, Section 424 doesn't apply at all. So Q4 is your last opportunity to cross the 90 percent threshold and avoid a year's worth of compounding interest. Second, by Q4 the year's income picture is fully clear (or nearly so), so the estimation error is much smaller than at earlier quarters.
The 90 Percent Threshold Under Section 424
Section 424 (the IT Act 2025 successor to Section 234B) applies if 'the assessee, who is liable to pay advance tax under section 404, has failed to pay such tax or, where the advance tax paid by such assessee is less than ninety per cent of the assessed tax'. The interest is 1 percent per month or part thereof, computed on the difference between assessed tax and advance tax paid, from 1 April of the AY (i.e., 1 April 2027 for FY 2026-27) until the date of self-assessment tax payment.
| Total Advance Tax Paid | Section 424 Trigger | Interest |
|---|---|---|
| 100% or more of assessed tax | Not triggered | Nil |
| 90% to 100% of assessed tax | Not triggered | Nil |
| Below 90% of assessed tax | Triggered | 1% per month from 1 April |
The 90 percent cushion is meant to absorb minor estimation errors. But once you fall below it, the interest applies on the entire shortfall (not just the gap below 90 percent), running from 1 April until self-assessment payment. Most chronic 424 hits come from skipping advance tax entirely and paying everything at ITR filing.
Presumptive Taxpayers Pay Everything Here
Section 44AD (small business) and Section 44ADA (professionals) filers, and their IT Act 2025 successors Section 60 and Section 61, have a special single-instalment rule. They are exempt from the Q1, Q2, Q3 schedule and pay 100 percent of advance tax in a single shot by 15 March. So Q4 is also the only advance tax deadline that matters for presumptive filers.
Income Tax Act 2025 Bridge
FY 2026-27 advance tax is governed by the IT Act 2025. Section 404 (was 208) for liability, Section 424 (was 234B) for annual underpayment interest, Section 425 (was 234C) for deferment interest. Substantive rules unchanged. Self-assessment tax under Section 140 of the new Act (was 140A in the 1961 Act) continues to govern any residual tax paid at ITR filing.
Final Estimation Checklist For Q4
By 15 March, your annual income should be near-final. Run a tight estimation that accounts for:
- •Salary (annual gross including any bonuses paid or accrued before 31 March).
- •Business or professional income, accrual basis, including invoices billed but not yet received.
- •All capital gains realised between 1 April 2026 and 15 March 2027 (and reasonably foreseeable gains expected by 31 March).
- •Rental income for the full FY 2026-27 (including any unreceived rent for March).
- •Interest income (actual + accrued, including FD interest computed but not paid out).
- •Dividend income for the full FY.
- •Deduct: Standard deduction Rs 75,000 (new regime) / Rs 50,000 (old regime), 80C / 80D / others under old regime, Section 87A rebate up to Rs 60,000 (new regime if income up to Rs 12L).
- •Less: Total TDS and TCS credits expected for the year (from 26AS reconciliation).
- •Less: Advance tax already paid in Q1, Q2, Q3.
- •The residual amount is the Q4 payment.
How To Pay
Same flow as earlier quarters. Income Tax e-Filing Portal, e-Pay Tax, Advance Tax (100), AY 2027-28. Save the challan acknowledgement (BSR code, challan serial number, date of payment). The payment must be reflected in 26AS before ITR filing in July, which usually takes 3 to 5 working days from challan date.
If you realise on 15 March itself that you've under-estimated, paying the top-up by end-of-day clears the Q4 obligation. Banks typically allow same-day RTGS or net banking until 6 PM IST, with NEFT cut-off varying.
Frequently Asked Questions
How we reviewed this page
The penalty amounts, deadlines, and regulatory requirements on this page are sourced directly from official government portals. We do not use secondary sources. When regulations change, we update the page.
- Income Tax Act 2025, Section 424↗
Annual underpayment interest provision (the IT Act 2025 successor to Section 234B of the 1961 Act).
- Income Tax Act 2025, Section 425↗
Quarterly deferment interest provision (the IT Act 2025 successor to Section 234C).
- Income Tax Act 2025, Section 404↗
Liability to pay advance tax (the IT Act 2025 successor to Section 208).
- Income Tax e-Filing Portal↗
e-Pay Tax module for advance tax payments.
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