IRD Circular on 2026/2027 Quarterly Tax Instalments
If you've been following the IRD's guidance on quarterly instalments this month, you've had a confusing nine days. The same circular was issued three times: on August 3, revised on August 6, and re-revised on August 12. Your first payment for the Year of Assessment 2026/2027 is due today.
So here's the reassuring part, stated up front. Nothing about what you owe or when you owe it changed. The due date is the same in all three versions. The formula is the same in all three versions. Every single change across those nine days was administrative: which form you file, when you file it, and what you can use as evidence if your numbers aren't final yet.
That's worth knowing before you read any further, because the natural reaction to "the IRD revised this three times" is to assume your payment has moved. It hasn't.
Which version of the circular applies right now?
Circular SEC/2026/E/06 (Re-Revised), dated August 12, 2026, signed by Commissioner General of Inland Revenue Rukdevi P.H. Fernando. It amends both earlier versions, which are now superseded.
| Version | Date | Status |
|---|---|---|
| SEC/2026/E/06 | August 3, 2026 | Superseded |
| SEC/2026/E/06 (Revised) | August 6, 2026 | Superseded |
| SEC/2026/E/06 (Re-Revised) | August 12, 2026 | Current |
The IRD did something genuinely helpful with the third version. It marks its own edit history: changes introduced by the August 6 revision appear in italics, and changes introduced by the August 12 re-revision are highlighted. So you can read one document and see the entire nine-day history without opening the other two.
All three versions sit under Section 90(3) of the Inland Revenue Act, No. 24 of 2017, as amended by the Inland Revenue (Amendment) Act, No. 11 of 2026. The circular explains how the Commissioner-General wants the law applied. It doesn't change the law, which is precisely why the due dates were never in play.
What did the original August 3 circular set out?
The first version established the framework everything else builds on.
Four due dates, straight from Section 90: August 15, November 15, February 15, and May 15 of the following year.
The formula for each instalment:
(A - C) / B
Where A is the tax payable on your taxable income for the immediately preceding year of assessment, calculated gross, before deducting any tax credit. B is the number of instalments remaining including the current one, so 4 for the first quarter, then 3, 2, and 1. C is the tax already paid during the year before the instalment falls due, including earlier instalments and any WHT or AIT credits already withheld or still to be withheld.
The August 3 version also set out the three methods for working out A: the standard prior-year basis, a set of alternative bases for people with no prior taxable income or lower expected income, and a fallback for taxpayers who genuinely can't estimate and need to write to the Commissioner.
One detail from the original is worth noting because it quietly disappeared. The August 3 text included "entitled foreign tax credits" in the definition of C. Foreign tax credits also appear elsewhere in the circular as something you take into account when estimating A, under Section 80 of the Act. Counting them in both places would have relieved the same credit twice.
What did the August 6 revision change?
Three days later, the IRD tightened several things. In the re-revised document these appear in italics.
The foreign tax credit wording came out of C, leaving those credits to be dealt with once, in the estimation of A. If you drafted your calculation from the August 3 text and put a foreign tax credit in both places, that's the one substantive number you should re-check.
The revision also pinned down the credit schedule deadline. Your credit schedule now goes to the Central Document Management Unit, or your Regional or Metro Office, on or before the last day of the month in which the instalment falls due. For this quarter that's August 31, 2026, then November 30, February 28 or 29, and May 31.
It added a mid-year revision route. If you're paying on the standard prior-year basis and your current-year income turns out lower, you can ask to switch basis before the last day of the month preceding a quarter, so by October 31, January 31, or April 30. The request goes to the CDMU with supporting information.
And it added the worked example for an employee with investment income, which is the example most salaried readers will care about. More on that below.
What did the August 12 re-revision change?
This is where the substance sits, and it's mostly good news for anyone whose books aren't closed.
The Statement of Estimated Tax came back as a fallback. If you're using an alternative basis and your 2025/2026 tax computation isn't finalised by today, you may use your final 2025/2026 SET to work out your first instalment. You then have to revise that to your actual 2025/2026 return for the second quarter. Only one revision is permitted.
That single paragraph solves a real problem. The prior-year basis assumes you know last year's tax payable. Plenty of people filing on time simply don't know it yet in mid-August.
Attachment 1 filing rules were spelled out. Taxpayers on an alternative basis file Attachment 1, form number SEC/2026/SA/01. If you used the SET basis for quarter one, you file Attachment 1 for quarter one and Attachment 1 (Revised) for quarter two and after.
A submission deadline was added, and it's later than you'd expect. Attachments are due on or before November 30, 2026, which means you can upload them alongside your 2025/2026 Return of Income rather than scrambling today. Upload to RAMIS under Upload Supporting Documents, then Supporting Documents, then Other Relevant Documents, titled TIN_2627_INSAttachment1. Manual submission to the CDMU, Metro, or your Regional Office is still accepted.
The scope narrowed. The first two versions applied to "the Year of Assessment 2026/2027 and subsequent years of assessment". The re-revised version applies to 2026/2027 only. Don't assume this circular governs 2027/2028. Expect fresh guidance next year.
Today's deadline is the payment. The paperwork deadline is November 30. If you're short on time right now, pay the correct amount and deal with Attachment 1 when you file your 2025/2026 return.
How do you calculate your first instalment?
Take the circular's own worked example. Mr X runs a hardware shop. His assessable income for 2025/2026 was Rs. 3,800,000.
| Step | Amount (Rs.) |
|---|---|
| Total assessable income 2025/2026 | 3,800,000 |
| Less: personal relief | (1,800,000) |
| Taxable income | 2,000,000 |
| First Rs. 1,000,000 at 6% | 60,000 |
| Next Rs. 500,000 at 18% | 90,000 |
| Next Rs. 500,000 at 24% | 120,000 |
| Gross tax payable (A) | 270,000 |
With no withholding credits, the first instalment is 270,000 divided by 4, which is Rs. 67,500, due today.
Notice what A is not. It isn't Mr X's estimate of this year's income. It's last year's tax, calculated gross. That's the change the 2026 amendment made to Section 90, and it's why most people no longer estimate anything. If you want the underlying mechanics, our guide to quarterly tax payments walks through the instalment system in full, and the income tax calculation guide covers the progressive bands.
If you qualify for the standard prior-year basis, you cannot use the alternative bases. The circular is explicit about this. The alternative methods are reserved for taxpayers with no taxable income last year, or who reasonably expect lower taxable income this year.
Do you need to pay an instalment at all this quarter?
A lot of people worrying about today's deadline don't actually have an obligation.
The circular confirms that if you derive income solely from employment and that income is subject to APIT, you don't make quarterly instalment payments and you don't file a credit schedule. That covers most salaried employees, including those whose APIT is calculated under Table 8.
It goes further. If you have employment income plus rent or interest income subject to AIT, and the AIT deducted covers your remaining liability for the year, you're also outside the instalment system.
The circular's Example 6 shows this. Mrs P earned Rs. 5,000,000 in employment income and Rs. 1,000,000 in interest in 2025/2026, giving taxable income of Rs. 4,200,000 after the Rs. 1,800,000 personal relief, and gross tax of Rs. 1,032,000. Her APIT credit of Rs. 960,000 and AIT credit of Rs. 90,000 total Rs. 1,050,000. Because her credits exceed her tax, she makes no quarterly instalment payments at all.
What happens if you pay late or pay too little?
The circular's compliance note is blunt: any underpayment, late payment, or non-payment attracts interest and penalty calculated on the standard basis. So an incorrect calculation doesn't just delay things, it's assessed against what you should have paid.
A 10% penalty applies under Section 179(2) to any instalment still unpaid 14 days after the due date. Separately, interest runs at 1.5% per month or part month under Sections 157 and 159, from the original due date with no grace period, and it compounds monthly. Section 157(1) sets interest running from the due date "determined without having regard to an extension of time under section 151", so an extension to pay does not stop interest accruing.
Because interest has no grace period and penalty does, paying something today is meaningfully better than paying nothing. If you've already fallen behind on earlier quarters, our guide on catching up on missed quarterly payments covers how the arithmetic works out.
Is the Statement of Estimated Tax gone or not?
Both, which is why this causes confusion.
Section 17 of the Inland Revenue (Amendment) Act, No. 11 of 2026, operative from April 1, 2026, amended Section 91 rather than repealing it. It substituted the words "for a year of assessment" with "for any year of assessment commencing prior to April 1, 2026".
So the SET obligation still exists in the statute book, confined to years of assessment starting before April 1, 2026. For 2025/2026 and earlier, it applied. For 2026/2027, you have no obligation to file one.
That's exactly what makes the August 12 fallback work. Your final 2025/2026 SET was a required filing, it exists, and the IRD is willing to accept it as evidence of last year's tax where your return isn't finalised. The SET isn't your instalment basis any more. It's a document you already have that can stand in for one. Our article on what changed with the Statement of Estimated Tax covers the transition in more detail.
What is the current position, in one place?
Here's everything that matters, as of today.
- Governing document: Circular SEC/2026/E/06 (Re-Revised), August 12, 2026. It applies to 2026/2027 only.
- First instalment due: today, August 15, 2026. This never changed.
- Formula:
(A - C) / B, with B equal to 4 for this quarter. This never changed. - A: last year's gross tax payable, before credits. Not an estimate of this year.
- Standard basis: no documentation to file with the Commissioner-General.
- Alternative basis: Attachment 1 required, with supporting calculations where you're claiming reduced income.
- If 2025/2026 isn't finalised: you may use your final 2025/2026 SET for this quarter, then revise to the actual return by quarter two. One revision only.
- Credit schedule: due August 31, 2026.
- Attachments: due November 30, 2026, uploadable with your 2025/2026 return.
- Salary-only income under APIT: no instalment, no credit schedule.
If you're on the standard basis with a finalised 2025/2026 computation, which is most people, the three revisions changed nothing for you at all. Pay last year's gross tax divided by four, less your credits, and you're done.
Frequently asked questions
Quick answers to common questions on this topic.
Which version of the IRD circular should I follow?
Follow Circular SEC/2026/E/06 (Re-Revised) dated August 12, 2026. It is the third and current version, and it amends the versions issued on August 3 and August 6. The earlier two are superseded. The re-revised document marks its own changes, so you can see exactly what moved between versions.
Did the August 15 quarterly payment deadline change?
No. All three versions of the circular set the same four dates: August 15, November 15, February 15, and May 15 of the following year. These come from Section 90 of the Inland Revenue Act, not from the circular, so the IRD could not have moved them by circular even if it wanted to.
Can I use my Statement of Estimated Tax for the first instalment?
Only in specific cases. If you are using an alternative basis because you had no taxable income last year or expect lower income this year, and your 2025/2026 computation is not finalised by August 15, the re-revised circular lets you use your final 2025/2026 SET for quarter one. You must then revise to your actual return by quarter two.
What is Attachment 1 and do I need to submit it?
Attachment 1 is the declaration form, numbered SEC/2026/SA/01, for taxpayers using an alternative basis rather than the standard prior-year basis. If you qualify for the standard basis, you do not file anything. If you use an alternative basis, Attachment 1 is required, with supporting calculations where you are claiming reduced income.
When do I have to submit the circular's attachments?
On or before November 30, 2026, under the deadline added by the August 12 re-revision. You can upload them to RAMIS when filing your 2025/2026 Return of Income, titled in the format TIN_2627_INSAttachment1. Manual submission to the CDMU, Metro, or your Regional Office is also accepted.
Do I pay quarterly instalments if all my income is salary?
No. If your only income is employment income subject to APIT, the circular confirms you have no quarterly instalment obligation and no credit schedule to file. The same applies if you also have rent or interest income and the AIT deducted on it already covers your remaining liability for the year.
What happens if I underpay my first instalment?
A 10 percent penalty applies under Section 179(2) to any instalment still unpaid 14 days after the due date. Interest runs separately under Sections 157 and 159 at 1.5 percent per month or part month from the original due date, with no grace period, and it compounds monthly until you pay.
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