The instalments
Advance tax is computed on the estimated income of the year, after tax deducted or collected at source.
| Due date | Cumulative tax paid by the date |
|---|---|
| 15 June | 15% |
| 15 September | 45% |
| 15 December | 75% |
| 15 March | 100% |
Interest on shortfalls
- Deferment. Interest is charged on the shortfall in each instalment: 3% for each of the first three instalments, and 1% for the March instalment. No interest arises for June and September if at least 12% and 36% respectively have been paid.
- Default. Where advance tax paid is less than 90% of the assessed tax, interest at 1% a month runs from 1 April after the year end until the tax is determined.
Under the Income-tax Act, 2025
From tax year 2026-27 the Income-tax Act, 2025 applies. The scheme carries over with new section numbers: the liability to pay advance tax arises under section 404, payments are made under sections 406 and 407, interest for default (below 90% of assessed tax) is charged under section 424, and interest for deferment of instalments under section 425, with the same four dates and the same 12% and 36% thresholds. The corresponding provisions of the 1961 Act, which govern years up to 2025-26, are sections 207 to 211, 234B and 234C.
In practice
- Estimate each instalment from the latest management accounts, not last year's return.
- Record the basis of each estimate, so that a later shortfall can be explained.
- Revisit the March instalment for one-off items such as asset sales or exchange gains.
References
- Income-tax Act, 2025, sections 404, 406, 407, 424 and 425
- Income-tax Act, 1961, sections 207 to 211, 234B and 234C
This note is general information on the law as at October 2026. It is not advice for any specific situation.