September is an important compliance month for businesses, professionals, companies and taxpayers with significant income that is not fully covered through TDS or TCS.
The second instalment of advance tax for FY 2026–27 becomes due in September. Taxpayers generally need to ensure that their cumulative advance-tax payment reaches at least 45% of the estimated annual advance-tax liability by 15 September.
At the same time, September 2026 is particularly important for businesses preparing their AY 2026–27 tax audit. The Income Tax Department currently states that the tax-audit report for FY 2025–26 (AY 2026–27) is due on 30 September 2026 for cases where the corresponding ITR due date is 31 October 2026.
This creates an important compliance window for businesses:
Advance Tax → Tax Audit → ITR Preparation → Final Tax Reconciliation
Businesses should therefore review their expected taxable income, advance tax already paid, TDS/TCS credits and audit requirements rather than treating September as just another accounting month.
What Is Advance Tax?
Advance tax is income tax paid during the financial year instead of waiting until the Income Tax Return is filed after the year ends.
It is sometimes called “pay-as-you-earn” taxation because taxpayers discharge their expected tax liability in instalments during the year.
The basic threshold remains ₹10,000 or more of tax payable during the year, after considering the applicable tax-payment framework. The Income Tax Department confirms that this threshold continues under the Income Tax Act, 2025.
For businesses, advance tax becomes particularly relevant because income can arise throughout the year from:
- Business profits
- Professional income
- Interest
- Capital gains
- Rental income
- Dividend income
- Other taxable receipts
TDS and TCS credits are taken into account while determining the remaining advance-tax liability.
Why Is September Advance Tax Important?
The September instalment is the second major advance-tax instalment of the financial year.
For taxpayers following the regular instalment system, the cumulative payment targets are:
| Instalment | Cumulative Advance Tax | Due Date |
| 1st instalment | At least 15% | 15 June 2026 |
| 2nd instalment | At least 45% | 15 September 2026 |
| 3rd instalment | At least 75% | 15 December 2026 |
| 4th instalment | 100% | 15 March 2027 |
The September requirement is therefore not simply 45% of the total amount as a fresh payment. It is the amount needed to bring the cumulative advance tax paid to at least 45% of the estimated annual liability, after considering earlier instalments.
Who Needs to Pay Advance Tax?
A taxpayer generally needs to pay advance tax when the estimated tax payable for the year, after considering relevant tax credits and reliefs, is ₹10,000 or more.
This can apply to:
- Companies
- LLPs
- Partnership firms
- Professionals
- Proprietorship businesses
- Individuals with substantial non-salary income
- Investors with significant capital gains
- Taxpayers earning interest or rental income
For businesses, advance-tax planning is especially important because taxable profits may fluctuate considerably during the year.
A company that expects substantially higher profits in the second half of the financial year should revisit its advance-tax estimate rather than relying entirely on its earlier calculation.
How to Calculate Advance Tax for September 2026?
The basic calculation can be understood through a simple process.
Step 1: Estimate Your Total Annual Income
Start by estimating the income expected for FY 2026–27.
For a business, this could involve forecasting:
Sales – Business Expenses = Estimated Business Profit
Then add other taxable income, where applicable.
Step 2: Calculate Estimated Tax
Apply the applicable tax rates and provisions to the estimated taxable income.
Step 3: Reduce Eligible Tax Credits
Consider:
- TDS
- TCS
- Applicable tax reliefs
- Earlier advance-tax payments
Step 4: Determine Total Advance-Tax Liability
The remaining amount represents the tax that needs to be discharged through advance tax, subject to the applicable provisions.
Step 5: Check the September Target
By 15 September 2026, the cumulative advance tax should generally reach at least 45% of the estimated annual advance-tax liability.
Example: Advance Tax Calculation for September 2026
Suppose a business estimates its total advance-tax liability for FY 2026–27 at:
₹10,00,000
The cumulative target by 15 September is:
45% × ₹10,00,000 = ₹4,50,000
Suppose the business already paid:
₹1,50,000 in June
It would therefore need to pay approximately:
₹4,50,000 – ₹1,50,000 = ₹3,00,000
by 15 September to reach the 45% cumulative target, assuming the estimate remains unchanged and there are no other relevant adjustments.
This is a simplified illustration. Actual calculations can differ depending on income type, tax regime, TDS/TCS, applicable surcharge, cess, reliefs and other circumstances.
What If Your Income Has Increased After June?
This is a common business situation.
Imagine that a company estimated its annual profit at ₹50 lakh in June but received several large orders during July and August. Its projected annual profit may now be significantly higher.
In such a case, simply repeating the June advance-tax calculation may result in an underpayment.
The business should re-estimate its annual taxable income before making the September payment.
This is particularly important for businesses with:
- Seasonal sales
- Large contracts
- Export income
- Capital gains
- High-value asset sales
- Variable professional receipts
- Significant interest income
- Foreign transactions
Advance tax should be treated as a dynamic estimate, not a one-time calculation.
What Happens If Advance Tax Is Not Paid Correctly?
Failure to pay sufficient advance tax or deferment of instalments can result in interest consequences.
Under the current framework, the Income Tax Department states that interest provisions corresponding to Sections 234B and 234C continue under the Income Tax Act, 2025.
Interest under the corresponding provision for failure to pay sufficient advance tax can generally be 1% per month or part of a month for the specified period, while deferment of instalments can attract interest under the applicable provision.
The exact calculation depends on the taxpayer’s circumstances and the applicable statutory provisions.
Therefore, businesses should not wait until the ITR filing stage to discover that advance tax was substantially short.
Advance Tax and Tax Audit: Why September 2026 Is Important for Businesses
For businesses subject to tax audit, September has another major compliance requirement.
For FY 2025–26 / AY 2026–27, the Income Tax Department confirms that the tax-audit report is to be filed using the existing forms under the Income Tax Act, 1961:
- Form 3CA
- Form 3CB
- Form 3CD
The current Income Tax Department guidance specifies 30 September 2026 as the tax-audit report due date for AY 2026–27 in cases where the related ITR due date is 31 October 2026.
This is an important distinction:
AY 2026–27 relates to FY 2025–26.
It is governed by the Income Tax Act, 1961 for the relevant compliance, even though the new Income Tax Act, 2025 has commenced for the subsequent tax year.
Tax Audit Due Date for AY 2026–27
The tax-audit deadline can be summarised as follows:
| Compliance | Relevant Period | Current Due Date |
| Tax Audit Report | FY 2025–26 / AY 2026–27 | 30 September 2026 |
| ITR for Tax Audit Cases | AY 2026–27 | 31 October 2026 |
| ITR for Transfer Pricing Cases | AY 2026–27 | 30 November 2026 |
| September Advance Tax | FY 2026–27 | 15 September 2026 |
The Income Tax Department specifically states that for transfer-pricing cases, the tax-audit report deadline is one month before the corresponding ITR due date, making the audit deadline 31 October 2026 where the ITR due date is 30 November 2026.
Has the Tax Audit Due Date for AY 2026–27 Been Extended?
As of the current Income Tax Department guidance available for September 2026, the tax-audit report due date for the relevant AY 2026–27 cases is 30 September 2026, with the transfer-pricing category following its separate timeline.
Businesses should not rely on social-media posts or old articles claiming an extension unless an official CBDT/Income Tax Department notification or circular confirms it.
This is particularly important during September because a last-minute assumption about an extension can create unnecessary compliance risk.
Who Is Required to Get a Tax Audit?
Tax audit requirements depend on the nature of the business or profession and the applicable statutory thresholds.
The Income Tax Department currently states that the tax-audit threshold for business is generally ₹1 crore, increasing to ₹10 crore where cash receipts and cash payments do not exceed 5% of the relevant totals.
For specified professions, the threshold is generally ₹50 lakh. There are also circumstances involving presumptive taxation where audit requirements can arise.
Therefore, turnover alone should not be used as the only test.
A business should also review:
- Cash receipts
- Cash payments
- Presumptive taxation
- Previous-year tax positions
- Nature of business
- Professional activity
- Applicable audit provisions
What Documents Should Businesses Prepare?
Businesses approaching September compliance should keep their financial and tax records organised.
Important records include:
- Trial balance
- Profit & loss account
- Balance sheet
- Sales register
- Purchase register
- Expense details
- Bank statements
- GST returns
- GST reconciliation
- TDS certificates
- TCS details
- Form 26AS
- AIS
- Fixed asset register
- Loan statements
- Interest calculations
- Advance-tax challans
- Previous ITR
- Previous tax-audit report
- Details of related-party transactions
- Foreign transaction details, where applicable
For tax audit, the CA may also require supporting documentation for the particulars reported in Form 3CD.
The Income Tax Department describes Form 3CD as the statement containing prescribed particulars accompanying the relevant tax-audit report.
September 2026 Business Tax Compliance Checklist
Businesses can use this simple checklist:
Before 15 September
Recalculate projected FY 2026–27 income
Estimate total tax liability
Check TDS/TCS credits
Review June advance tax
Calculate September instalment
Pay advance tax by 15 September
Before 30 September
Finalise FY 2025–26 accounts
Complete tax-audit working
Review Form 3CD information
Reconcile GST and books
Verify tax-audit report
File applicable tax-audit report
After September
Prepare AY 2026–27 ITR
Review tax payable/refund
Check tax audit observations
Reconcile 26AS/AIS
Prepare for the October ITR deadline
Common Advance Tax Mistakes Businesses Should Avoid
1. Using Last Year’s Tax Liability
Last year’s tax is useful as a reference but may not reflect current-year income.
2. Ignoring Capital Gains
A large asset or investment transaction can substantially change the tax calculation.
3. Not Considering TDS/TCS
Tax credits should be properly considered while calculating the remaining liability.
4. Waiting Until March
Waiting until the final instalment can create a significant cash-flow burden and potential interest exposure.
5. Ignoring September Tax Audit Work
For businesses subject to audit, September is also a critical month for AY 2026–27 compliance.
6. Assuming an Extension Without Official Confirmation
Tax deadlines should be verified through official government notifications rather than social-media claims.
Advance Tax vs Self-Assessment Tax
These two terms are often confused.
| Advance Tax | Self-Assessment Tax |
| Paid during the financial year | Generally paid before filing the ITR when tax remains payable |
| Based on estimated annual income | Based on final tax computation |
| Paid in instalments in applicable cases | Paid after considering final income and tax credits |
| Helps distribute tax payment through the year | Helps settle remaining tax before return filing |
The Income Tax Department confirms that after preparing the ITR and considering TDS and advance-tax payments, any remaining tax payable is generally discharged as self-assessment tax before submission of the return.
How a Tax Consultant Can Help Businesses in September
September compliance can become complicated when a business has multiple tax obligations running simultaneously.
A professional tax consultant can assist with:
- Advance-tax estimation
- Tax planning
- Tax audit preparation
- Form 3CA/3CB/3CD compliance
- GST and income-tax reconciliation
- TDS/TCS reconciliation
- Tax liability calculation
- ITR preparation
- Business tax advisory
- Identification of potential tax risks
For companies with significant turnover, complex transactions or international operations, professional review can be particularly valuable.
Frequently Asked Questions
What is the advance tax due date in September 2026?
The second instalment of advance tax for FY 2026–27 is due on 15 September 2026. The cumulative advance tax paid should generally reach at least 45% of the estimated annual advance-tax liability.
Who needs to pay advance tax?
Generally, taxpayers whose estimated tax payable for the year is ₹10,000 or more, after considering the applicable provisions and credits, may be required to pay advance tax.
How do I calculate advance tax for September 2026?
Estimate your annual taxable income, calculate the expected tax liability, reduce applicable TDS/TCS and earlier advance-tax payments, and ensure that the cumulative payment reaches the required September instalment level.
What happens if I miss the 15 September advance-tax payment?
Interest may apply for deferment or short payment of advance tax under the applicable provisions. The exact calculation depends on the circumstances of the taxpayer.
What is the tax audit due date for AY 2026–27?
For FY 2025–26 / AY 2026–27, the Income Tax Department currently specifies 30 September 2026 as the tax-audit report due date for cases where the corresponding ITR due date is 31 October 2026.
Has the tax audit due date for AY 2026–27 been extended?
Businesses should rely only on an official CBDT or Income Tax Department notification for any extension. The current Income Tax Department guidance lists 30 September 2026 for the applicable AY 2026–27 tax-audit cases.
What is the tax audit due date for transfer pricing cases for AY 2026–27?
For transfer-pricing cases where the applicable ITR due date is 30 November 2026, the Income Tax Department guidance states that the tax-audit report due date is 31 October 2026.
What is the tax audit limit for AY 2026–27?
For business, the general threshold is ₹1 crore, increasing to ₹10 crore where cash receipts and cash payments do not exceed 5% of the relevant totals. For specified professions, the threshold is generally ₹50 lakh, subject to the applicable provisions.
Which forms are used for tax audit for AY 2026–27?
For FY 2025–26 / AY 2026–27, the applicable tax-audit forms remain Form 3CA with Form 3CD or Form 3CB with Form 3CD, depending on the taxpayer’s circumstances.
What is the ITR filing due date for tax-audit cases for AY 2026–27?
For cases subject to tax audit, the current Income Tax Department guidance indicates an ITR due date of 31 October 2026, while transfer-pricing cases have a 30 November 2026 ITR due date.
Does the new Income Tax Act affect AY 2026–27 tax audits?
AY 2026–27 relates to income earned during FY 2025–26. The Income Tax Department confirms that the tax-audit report for FY 2025–26 continues under the Income Tax Act, 1961 using the applicable existing forms, even though the new Income Tax Act, 2025 applies to Tax Year 2026–27.
What should businesses do in September 2026?
Businesses should review their projected FY 2026–27 income, calculate the September advance-tax requirement, check TDS/TCS credits and complete their AY 2026–27 tax-audit work where applicable.
Final Takeaway
September 2026 is an important tax-compliance month for Indian businesses.
The immediate priority for FY 2026–27 is the 15 September advance-tax instalment, with cumulative payment generally reaching at least 45% of the estimated annual liability.
At the same time, businesses dealing with AY 2026–27 tax audit requirements need to focus on the 30 September 2026 tax-audit deadline for the applicable non-transfer-pricing cases.
The best approach is to handle both requirements together:
Estimate income → Calculate tax → Reconcile TDS/TCS → Pay advance tax → Finalise accounts → Complete tax audit → Prepare ITR.
Businesses should also verify any claimed deadline extension through official Income Tax Department or CBDT communications before relying on it.
For businesses that have complicated accounts, tax audits, GST reconciliations, international transactions or significant tax liabilities, professional tax and audit support can help ensure that September compliance is completed accurately and on time.
JJJ & Company LLP can provide professional assistance relating to taxation, compliance, foreign investment-related matters and other business setup requirements, depending on the company’s specific circumstances.
