Advance tax on capital gains: do you owe it, and when?

The rule in one line

If your tax for the year, after TDS, is ₹10,000 or more, you are expected to pay it in instalments during the year rather than all at once when you file. That includes tax on capital gains. A salaried person whose employer deducts all their tax usually owes no advance tax, but the moment you sell shares or fund units at a profit, the tax on that profit is not deducted by anyone, so it falls to you.

Resident senior citizens aged 60 and above who have no business or professional income do not have to pay advance tax. Our advance tax and TDS guide explains the general rule, and our companion post on capital gains tax on stocks and property covers the rates.

The four dates

For FY 2026-27, that is 15 June 2026, 15 September 2026, 15 December 2026 and 15 March 2027. Taxpayers who file under the presumptive scheme for small businesses pay all their advance tax in a single instalment by 15 March. The Income Tax Department's portal lists the dates and lets you pay the tax online.

Because the rates and dates are fixed, you can compute your liability yourself with the advance tax calculator.

What happens if you miss a date

Two interest charges can apply under the 1961 Act's sections 234B and 234C (renumbered in the Income-tax Act, 2025, but working the same way):

• Section 234C: 1% a month on the shortfall in an instalment, for three months in the case of the June, September and December instalments and one month for March. It is waived if you have paid at least 12% by 15 June and 36% by 15 September.
• Section 234B: 1% a month, from 1 April after the year, if the advance tax you paid by 31 March is less than 90% of your final tax.

The capital gains rule is the part most people miss. There is no 234C interest on a shortfall caused by capital gains you could not have predicted, provided you pay the tax on that gain in the instalments still remaining after the gain, or by 31 March if none remains. In other words, a gain that arises on 20 October needs no payment on 15 June or 15 September; you simply include its tax in the 15 December or 15 March payment.

A worked example

An illustration with assumed numbers. A salaried person's employer deducts all tax on salary. On 20 October 2026 they sell equity shares held for 8 months and book a short-term gain of ₹3 lakh.

• Tax at 20%: ₹60,000.
• Cess at 4%: ₹2,400.
• Total: ₹62,400.

Nothing was due on 15 June or 15 September for this gain. The person can pay ₹62,400 on or before 15 December 2026, or on 15 March 2027, and no 234C interest is charged for the gain. To stay clear of 234B as well, pay before 31 March so that at least 90% of the final tax has been paid.

The same gain booked on 5 March would be paid by 15 March. If it arises after 15 March, pay it by 31 March.

Contrast that with a person who ignores this and pays at the time of filing, say in July 2027. Interest under 234B would run at 1% a month from 1 April 2027 on the unpaid ₹62,400, which is ₹624 a month, plus interest under 234A if filing is also late.

Practical steps

1. Estimate gains as you sell. Keep a running tally of realised gains; your broker's profit-and-loss report helps. The capital gains calculator handles the standard rates.
2. Remember the exemption. The first ₹1.25 lakh of long-term equity gains in a year is exempt, so many small sellers owe nothing. See our post on switching funds as a taxable event for how switches count as sales.
3. Do not count on the rebate. The rebate under section 87A does not cover tax on short-term or long-term capital gains taxed at special rates; read our section 87A explainer.
4. Net losses before paying. Losses on other holdings may reduce the gain; see tax-loss harvesting.
5. Pay online. Use the e-pay tax facility on the portal, choose the assessment year, the "advance tax" type and the correct date, and keep the challan.
6. Reconcile later. Your payments appear in your Form 26AS and AIS; see our explainer on Form 26AS, AIS and TIS.

When you may not owe any

If your total tax after TDS is below ₹10,000 there is no advance tax requirement. And if your gains are long-term on equity and within the ₹1.25 lakh limit, there is no tax at all. If you are not sure, run the numbers in the income tax calculator near the end of the year, while you still have time to pay on 15 March.

Where advance tax trips people up

Mutual fund SIP redemptions. If you run an SWP or redeem units regularly, the gains build up through the year. Track them against the ₹1.25 lakh exemption and top up on the next due date.

Gains after a partial year. If you sell in January, there is one instalment left (15 March). Pay the full tax on that gain by then.

Dividend and interest. Other income also raises your advance tax. TDS may cover some of it, but check the shortfall.

Wrong challan details. Pay under the correct assessment year (2027-28 for FY 2026-27) and "advance tax" as the type. A mistake here delays your credit, and the portal's news page is where the department announces any change to dates. Paying a day late costs a month's interest, since part of a month counts as a full month.

This article is for education only and is not tax advice. Tax rates, dates and section numbers change; verify them on incometax.gov.in or with a qualified professional.