If you made a profit in F&O or intraday trading this year, you may already owe tax, and the next deadline is 15 December 2026.
Salaried people rarely think about advance tax because their employer deducts TDS every month. Nobody deducts tax on your trading profits. So the tax department expects you to pay it yourself, in four instalments during the year, not in one go when you file your return.
Miss an instalment and you pay 1% interest per month on the shortfall. It is not a big penalty on one month, but traders who ignore it all year end up paying interest on every quarter they skipped.
Who has to pay advance tax
You must pay advance tax if your estimated tax for the year, after TDS and TCS, is ₹10,000 or more.
For traders, this usually covers:
- F&O profits, which are business income taxed at your slab rate
- Intraday profits, which are speculative income taxed at your slab rate
- Capital gains from selling shares or equity mutual funds
- Salaried people whose trading profits push their tax above what the employer’s TDS covers
Who is exempt: resident senior citizens (60 and above) with no business or professional income. F&O and intraday trading count as business income, so a senior citizen who trades F&O is not exempt.
From 1 April 2026, the Income-tax Act, 2025 replaces the 1961 Act. The section numbers have changed, but the ₹10,000 rule, the due dates and the interest rates stay the same.
The 4 due dates
The percentages are cumulative: each date shows the total you should have paid by then, not a separate amount. If 15 December falls on a weekend or bank holiday, pay a day early rather than risk it.
How to work out what you owe
Trading income is hard to predict, so advance tax is based on your best estimate of the full year’s income. You update it at each instalment.
- Download your tax P&L report from your broker’s back office for April to date.
- Estimate the rest of the year. A simple, honest method is to assume the coming months look like the months so far.
- Add any other income: salary, interest, rent, capital gains.
- Work out the tax on the total, then subtract any TDS already deducted.
- Pay enough to reach the cumulative percentage due by the next date.
Worked example (new tax regime, Tax Year 2026-27): Priya is a full-time trader with no salary. She expects F&O profit of ₹18 lakh for the year and has no TDS.
| Step | Amount |
|---|---|
| Tax on ₹18 lakh at new-regime slabs | ₹1,60,000 |
| Add 4% health and education cess | ₹6,400 |
| Total tax for the year | ₹1,66,400 |
| Due by 15 June (15%) | ₹24,960 |
| Due by 15 September (45%) | ₹74,880 |
| Due by 15 December (75%) | ₹1,24,800 |
| Due by 15 March (100%) | ₹1,66,400 |
The amounts are cumulative. If Priya paid ₹74,880 by September, she pays another ₹49,920 by 15 December.
If your trading turns into a loss, you simply pay less at the next instalment. Advance tax already paid is not lost: any excess comes back as a refund when you file your return.
What happens if you miss it
There is no fine, but there is interest: 1% per month, or part of a month, simple interest.
| Interest | Old section (1961 Act) | New section (2025 Act) | When it applies |
|---|---|---|---|
| Deferment | 234C | 425 | You paid less than the cumulative % due by an instalment date |
| Default | 234B | 424 | Advance tax paid by 31 March is less than 90% of your tax for the year |
Small cushion: no deferment interest applies if you paid at least 12% of your tax by 15 June and at least 36% by 15 September.
Example: if Priya pays nothing by 15 December, the deferment interest on the December instalment alone is about ₹3,744 (₹1,24,800 × 1% × 3 months). That comes on top of interest for the June and September instalments she also missed.
How to pay online
- Go to the Income Tax e-filing portal and open e-Pay Tax.
- Choose Income Tax, Tax Year 2026-27, and type of payment Advance Tax (100).
- Pay by net banking, UPI, card or at a bank counter.
- Save the challan receipt. You will need its details when you file your return.
Your 15 December checklist
- Download your tax P&L from your broker for 1 April to today
- Estimate your full-year trading profit, honestly
- Add salary, interest, rent and capital gains
- Work out the tax and subtract any TDS
- Pay up to 75% of the year’s tax on the e-filing portal
- Save the challan and set a reminder for 15 March
Advance tax is one of many costs that quietly eat into trading profits, along with brokerage, STT and slippage. Our complete guide to tax in the stock market covers the rest, and our Derivatives (F&O) course teaches accounting and taxation as a full module. Not sure where to start? Book a free demo class.
Sources
- TaxGuru: advance tax under the Income-tax Act, 2025
- ClearTax: advance tax due dates and interest
- Income Tax Department e-filing portal
9AM Traders Academy provides education only. This article is general information, not tax advice. Tax depends on your full situation, including other income, deductions and the regime you choose. Confirm your advance tax with a chartered accountant.