Advance Tax Calculator

Income Tax Payment forms the major chunk under the Central Government’s revenue heads. Rather than waiting until the end of the Financial Year (FY), Advance Tax Payment allows the continuous collection of money in the government’s kitty. An Advance Tax Calculator allows taxpayers to assess their tax liabilities on their estimated total income in advance.

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What is Advance Tax?

Advance Tax, aka the “Pay as You Earn” Scheme, is the estimated income tax paid by taxpayers whose sources of income are other than their salary. 

Features of Advance Tax:

  • These other income sources can be rent, capital gains from trading in shares, interest on Fixed Deposits, winning lotteries, profits earned from a business, etc.

  • The advance tax payment should be made in the same financial year in which the incomes were received.

  • Advance tax payments can be made online through any of the authorized banks or the Income Tax Department portal and National Securities Depository websites.

What is Advance Tax Calculator?

Advance Tax Calculator is an online computation tool using which taxpayers can estimate their advance tax payment liabilities based on their taxable income. 

Based on the projected income receipts, expenses, liable taxes, applicable cess, TDS paid, and tax exemptions due for the year, advance tax is to be determined.

Instalments Payable of Advance Tax in 2023-24

The Advance tax payment is to be done in installments as given below:​​

a) For all the advance taxpayers other than those referred to in 44AD and Sec. 44ADA, the installments to be paid are as follows:

Due Date of Payment  Advance Tax Payment Amount
By 15th June Up to 15% of Advance Tax
By 15th September Up to 45% of Advance Tax
By 15th December Up to 75% of Advance Tax
By 15th March Up to 100% of Advance Tax

b) For all the advance taxpayers who are opting presumptive taxation regime under Section 44AD and Section 44ADA:

Due Date of Payment  Advance Tax Payment Amount
By 15th March Up to 100% of Advance Tax

Note: According to the Income Tax Department, the advance tax paid by 31st March is also considered as successfully paid for the same financial year. 

How to Calculate Advance Income Tax?

Let us understand how the advance tax is calculated through sample data.

Advance Tax Calculation Example:

Advance Tax Estimation Amount

(in Rs.)

Total Amount 

(in Rs.)

Income Earned from Profession
Gross Receipts 30,00,000
Gross Expenditure 16,00,000 14,00,000
Income From Other Sources
Income from Renting Your Property 1,20,000
Interest from Fixed Deposits 20,000 15,40,000
LESS: Deduction under Section 80C
Contribution to PPF Fund 60,000
Life Insurance Premium 30,000
90,000 14,50,000
LESS: Deduction under Section 80D 20,000
Health Insurance 10.000
30,000 14,20,000
Payable Tax 1,67,500
Education Tax @4% 6,700 1,74,200
LESS: Tax Deducted at Source (TDS) 43,200 1,31,000
TOTAL ADVANCE TAX PAYABLE 1,31,000

Advance Tax Payment Example:

Due Date Advance Tax (in %) Amount (in Rs.)
15th June 15% Rs. 19,650
15th September 45% Rs. 58,950
15th December 75% Rs. 98,250
15th March 100% Rs. 1,31,000

Invest & Save upto ₹46,800 per annum in taxInvest & Save upto ₹46,800 per annum in tax

Who is Liable for Pay Advance Tax Payments?

An individual or business is liable to pay advance tax under the following conditions:

  • The tax liability is more than Rs. 10,000 in a financial year after adjusting TDS/TCS & MAT credit.

  • The individual is a salaried, freelancer, business, or self-employed person.

  • Income is earned from capital gains on shares trading.

  • Interest is earned on Fixed Deposits.

  • Income earned from winning a lottery.

  • Income earned from property rent.

Who is Not Liable for Advance Tax Payment?

Only Senior Citizens are not required to pay Advance Tax as per the Income Tax Department if they fulfill the following conditions:

  • If their age is more than 60 years,

  • If they are a resident of India, and

  • If they do not earn income from any business or profession.

Deductions on Advance Tax

The following deductions are allowed in Advance Tax Payment calculation:

  • Under Section 80C of the IT Act, the premiums payments are made in Tax-saving investment products like Life Insurance, Unit-linked Insurance Plans (ULIPs), Equity Linked Savings Schemes (ELSS), etc.

  • Payment made towards PPF Account.

  • Section 80D of the IT Act exempts the Tax on the premiums paid under Health Insurance plans.

  • Expenses directly related to your profession or business.

Late Advance Tax Payment

As per the Income Tax Act 1961, if the individual pays less than the total assessed Advance Income Tax Payment liability, then

  • Under Section 234B and Section 234C, interest at 1% per month on the defaulted amount will be charged.

  • This interest will be charged every month until the Advance Tax is paid in full.

Benefits of Advance Tax Payment

Let us list below the benefits of Advance Income Tax Payment:

  • Periodically paying Advance Tax reduces the year-end stress a taxpayer gets from lump sum tax payments.

  • It makes the tax collection process easy.

  • Regular Advance Income Tax payments ease the financial crunch on Central Government’s pocket and provide them with continuous cash flow.

  • It protects individuals by avoiding any default on their tax payments.

  • It helps taxpayers to manage their finances and track their income regularly during the year.

Wrapping It Up!

The advance tax payment is done in periodic installments, allowing you to manage your expenses and investments smartly. It is also crucial for taxpayers to estimate their income and calculate the advance taxes with extra care as it directly impacts your purse and spending capability.

FAQ's

  • What if I pay more than the actual tax liability?

    In this case, you can claim a refund of your excess amount while filing your Income Tax Return (ITR). If the excess amount is more than 10% of your tax liability, the Income Tax Department pays you interest at 6% p.a. on that excess amount.
  • Do NRIs have to pay advance tax?

    Yes, NRIs have to pay advance tax if the tax liability is more than Rs. 10,000 on the income earned from India.
  • What is the last date to pay advance tax?

    For taxpayers who fall under the presumptive tax regime of Sec. 44AD and Section 44ADA must pay advance tax in full by 15th March. For all other taxpayers, the advance tax is paid in the following installments:
    • 15% of Advance Tax liability- by 15th June
    • 45% of Advance Tax liability- by 15th September
    • 75% of Advance Tax liability- by 15th December
    • 100% of Advance Tax liability- by 15th March
  • Can I not pay advance tax?

    If you are a salaried, business, freelancer, or self-employed individual whose tax liability is more than Rs. 10,000 per year after adjusting the TDS, then you are liable to make an advance tax payment. If you fail to pay advance tax, then interest at the rate of 1% per month is charged on the taxable amount not paid.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
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