Advance tax September 15 deadline: what RSU holders in India need to do

September 15 is four weeks away. For Indian RSU holders at US multinationals, this is one of the two advance tax deadlines that actually matters — the one where you need 45% of your full-year tax liability already paid.

Most RSU holders at large employers are largely covered by TDS from sell-to-cover. But "largely covered" is not the same as "covered" — and the gap is where Section 234C interest accrues.

Here is how to check where you stand and what to do before September 15.

The four advance tax installments

India's advance tax system requires you to pay your tax in four installments during the financial year:

Deadline	Cumulative % of total tax due
June 15	15%
September 15	45%
December 15	75%
March 15	100%

"Cumulative" means that by September 15, the sum of everything paid so far — June 15 installment + September 15 installment + all TDS deducted — must be at least 45% of your total estimated tax liability for the year.

If you paid nothing in June and your TDS has been covering the liability, you need to check whether TDS alone has crossed 45% of your full-year estimate.

The Section 234C cost of missing this deadline

If your cumulative payments (TDS + advance tax) fall short of the 45% threshold on September 15, Section 234C applies:

Interest = 1% per month × shortfall × 3 months

Shortfall	234C interest
₹50,000	₹1,500
₹1,00,000	₹3,000
₹5,00,000	₹15,000
₹10,00,000	₹30,000

Not catastrophic, but avoidable. The interest is added to your tax payable and calculated at ITR filing time.

Step 1: Estimate your total FY2026-27 tax liability

You need a number to work backwards from. Here is how to build it:

Income sources to include

Salary income (including RSU perquisite):

• Base salary April 2026–March 2027 (annualise your monthly salary)
• RSU perquisite: FMV at vest × shares vested × SBI TTBR for each vest date
  • Check your broker statements or Form 16 Part B for vests that have already happened (April–August)
  • Estimate future vestings in Q3 (October–December) and Q4 (January–March) using current stock price
• Bonus, if known for this year

Capital gains (if you have sold RSU shares or other investments):

• STCG from shares sold within 24 months of vest: taxed at slab rate
• LTCG from shares held 24+ months: taxed at 12.5%
• STCG from equity mutual funds/ETFs: 20%
• LTCG from equity mutual funds (above ₹1.25 lakh threshold): 12.5%

Other income:

• Interest income, dividends, rental income — add to total

Apply the tax rates

For income above ₹50 lakh (new regime, FY2026-27):

Income slab	Rate
Up to ₹4 lakh	Nil
₹4–8 lakh	5%
₹8–12 lakh	10%
₹12–16 lakh	15%
₹16–20 lakh	20%
₹20–24 lakh	25%
Above ₹24 lakh	30%

Add surcharge if applicable:

• Income ₹50L–₹1Cr: 10% surcharge on income tax
• Income ₹1Cr–₹2Cr: 15% surcharge
• Income above ₹2Cr: 25% surcharge

Add 4% health and education cess on (tax + surcharge).

Most RSU holders at senior levels will be in the 30% slab with 10% surcharge and 4% cess — effective rate approximately 34.3%.

Step 2: Calculate what TDS has already covered

Your employer deducts TDS on your salary (including RSU perquisite) every month and deposits it with the government. This TDS counts toward your advance tax obligation.

Where to find TDS deducted so far:

• Form 26AS on the Income Tax portal (updated monthly with a short lag)
• AIS (Annual Information Statement) — more comprehensive
• Your payslips for each month April–August

Add up all TDS deducted April–August 2026. This is your "advance tax already paid" for purposes of the September 15 calculation.

Step 3: The September 15 check

Formula:

Amount needed by Sept 15 = Total estimated tax × 45%
Already covered = TDS deducted April–August + any advance tax paid in June
Gap = Amount needed − Already covered

If Gap > 0: pay that amount before September 15 via Challan 280. If Gap ≤ 0: you are covered for this installment — no action needed.

Example

Situation: Senior engineer, ₹35 lakh base salary, ₹12 lakh RSU perquisite from April–August vests, expects another ₹8 lakh in vests Q3/Q4. No capital gains sales yet. New tax regime.

Item	Amount
Total projected income	₹55 lakh (₹35L salary + ₹20L RSU perquisite)
Estimated tax (30% slab, 10% surcharge, 4% cess)	≈₹14.2 lakh
45% threshold (Sept 15 target)	₹6.39 lakh
TDS deducted April–August (employer)	₹5.8 lakh
Gap to pay by September 15	₹59,000

This engineer needs to pay ₹59,000 in advance tax before September 15 to avoid 234C interest on this installment.

The RSU perquisite complication: future vests are uncertain

Your Q3 and Q4 vest values depend on the stock price on vest dates you haven't reached yet. This makes advance tax estimation inherently approximate.

Conservative approach: Estimate future vests using the current stock price. If the stock rises, your Q4 advance tax payment (March 15) will top up the shortfall — any 234C interest on Q3/Q4 shortfall is small relative to the effort of over-estimating now.

Aggressive approach: Pay only based on vests that have already happened (April–August actuals). Accept some 234C interest on later installments if vests come in higher. The interest at 1%/month × 3 months is modest enough that many RSU holders treat it as a rounding error.

The right answer depends on your vest schedule and how much your stock has moved post-earnings. If you hold MSFT or AMZN — both up 8–10% post-earnings this week — your Q3 and Q4 vest values are likely higher than when you last estimated.

The capital gains exception: what it covers and what it doesn't

Section 234C has a specific carve-out: if capital gains (or casual income) arise after the due date of an installment, you are not required to have included that income in that installment's calculation. You can pay the tax on those gains in the next available installment.

The practically important version of this:

If you sell RSU shares after September 15 (generating LTCG or STCG), the capital gains tax on that sale does not need to have been included in your September 15 calculation. You include it in the December 15 installment instead.

If you sell after December 15, you can pay 100% of the capital gains tax by March 15 with no 234C interest.

What this does NOT cover: The RSU perquisite at vest is classified as salary income under Section 17(2) — not capital gains. TDS on the perquisite is deducted by your employer at vest. The perquisite does not get the capital gains exception. Your employer's TDS is the mechanism that covers this.

How to pay: Challan 280

Advance tax is paid via Challan 280 on the Income Tax portal:

1. Go to incometax.gov.in → e-Pay Tax
2. Enter PAN, assessment year (AY 2027-28 for FY2026-27)
3. Select Tax applicable: (0021) Income Tax (Other than Companies)
4. Select Type of Payment: (100) Advance Tax
5. Enter amount, pay via net banking or UPI
6. Save the challan receipt (BSR code, challan serial number, date) — needed for ITR filing

Payment must be made and reflected before midnight on September 15. Allow at least 1 business day for bank processing. Pay by September 13–14 to be safe.

The 90% safe harbour

One important simplification: if your total TDS + advance tax paid by March 31 equals at least 90% of your final tax liability, Section 234B interest (different from 234C) is waived. This is a separate provision from 234C installment compliance, but it means that if your employer's TDS covers close to your full liability, the remaining gaps in installment timing are small.

Most RSU holders at companies that do accurate sell-to-cover will find that their employer's TDS is close to their actual liability. The advance tax calculation is primarily relevant for:

• Holders with significant capital gains from selling RSU shares (variable, not covered by salary TDS)
• Holders whose Q3/Q4 vests significantly exceed employer TDS estimates
• Holders on the old tax regime with large deductions that reduce liability below what the employer assumed

Summary: what to do before September 15

1. Pull your TDS figures from Form 26AS or your payslips (April–August TDS)
2. Estimate full-year income — annualised salary + RSU perquisite (actuals + estimated future vests)
3. Calculate 45% of estimated total tax
4. Check the gap — if TDS < 45% of total tax, pay the difference via Challan 280 before September 15
5. Save the challan — BSR code and serial number go into your ITR filing in March

If you want to run the numbers quickly, the advance tax calculator covers the Section 234C interest on each installment based on your income and TDS figures.

The next installment deadline is December 15 (75% cumulative). If your Q3 RSU vests materialise higher than estimated — particularly if you hold MSFT or AMZN after this week's earnings — revisit your estimate in November before that deadline.