Estimate Income to calculate advance tax

Advance tax will be calculated on the estimate income during the year. It is the tax, which paid by us in advance to the Government. The tax which is paid on actual income called self-assessment tax. The income should be correctly estimated according to last year average.

If any capital gain or any other income earned after paying installment, then next installment should be revised accordingly. And if such income earned after 15th March then it should be deposited before 31st March.

The advance tax rates are calculated by the income tax slab for that assessment year. Suppose if we assume today date to calculate advance tax, i.e. 22nd July 2017, then we will check the income tax slab for the A.Y. 2018-19. And we will estimate the income for F.Y. 2017-18.

Check Income Tax Slab for A.Y.2018-19 Here

Penalty on Failure to Pay Advance Tax

The advance tax is mandatory for those, whose tax is more than Rs.10,000 during the year. So, if the payment is not made or shortly made, then it attracts the penal interest for short payment and non-payment of advance tax.

We have also covered the topic of “interest on failure to deposit Advance Tax” in detail.

After calculating the entire tax on the income of the F.Y. 2017-18, split it according to the percentage of installment. See our article Advance Tax Installment and Due Dates.

For Example:

Mr. X calculate/estimate his taxable income Rs. 4,84,000/– for F.Y. 2017-18.

Tax on the income is 12050/- (including surcharge and education Cess)

So Mr. X is liable to pay advance tax as his tax is more than Rs.10,000/-

Advance Tax is payable in this case is Rs.12050/-, but it is paid in installment, and installments will be as follows.

 Installments Percentage Tax 1st Installment by 15-06-2017 15% of 12050 1807 2nd Installment by 15-9-2017 30% of 12050 3615 3rd Installment by 15-12-2017 30% of 12050 3615 4th Installment by 15-03-2018 25% of 12050 3012

So in above example, in case of Mr. X re-estimates his income or earned the short-term or long term income then Mr. X should revise the advance tax accordingly.

Mr. x is liable to pay interest u/s 234C for any short payment of advance tax. Hope you liked our article and understood that how to calculate advance tax. However, you can ask your queries by writing your comment in the form given below. We will try to answer within 24 hours.

Income Tax Slabs / Advance Tax Rates

Who is Liable to Pay Advance Tax?

Interest on Short Payment Non Payment of Advance Tax

20 thoughts on “How to Calculate Advance Tax?”

1. RAJ KUMAR SHARMA

BUT I WANT TO KNOW . TOTAL INCOME – EXEMPTED RS. 250000 = taxable income ( is correct ? ) PLS. TELL ME.

2. Imran

Thanks very use full

3. shailendra bansal

4. varsha

pls inform me how to calculate Advance tax for Partnership firm – Example – when P&L for the year 2013.14 is 16,40,000 and TDS receivable is 4,60,000

5. carmeline fernandes

ur artile is very knowledgeable

but hou to calculate estimate income for the F.Y. 2014 -2015
and i dint understand the figure u had put for calculation for 40% for installment of 15th march 2015
thanks for article
i will grateful if u clear my above points by sending through emailed

6. pooja

thanks for giving such information

7. SUJATHA S

THANKS FOR GIVING SUCH USEFUL INFORMATION

8. Pramod Kumar Bhardwaj

Good Evening Sir

My question is i am working in a Pvt Ltd. My Salary is Rs. 25000/- P.M. ( F.Y. 2014 – 2015 ) and My Child Tution Fee is Rs. 70000/- P.A. (Approx) , What will be my Liability of Income Tax/ TDS ?

9. Nitin Pareek

sir i have get 350000/ pa salary & i have invest in ppf & mutual fund than how i will calculate my advance tax for a.s year 2014-15

10. rishi kumar

sir good evening i want to know that how to calculate estimated profit in the running partnership firm for advance tax purposes so pls guide me

11. syamsundar

when the estimate of income will be done and on what basis?

12. satya vasavi

good article helped me a lot thank u

13. Mrutyunjaya parida

Sir,
Good day,

thanks for very good information. My question is i am working in a pvt ltd we expect profit will be in F/Y 2013-14 Rs 9,00,000/- during F/Y 2013-14 tds certificate will be receivable Rs1,26,000/- (as per A/Y 2013-14), please guide me how i will be calculate advance tax
i.e Rs. 9,00,000/- * 30.3%= Rs 2,72,700/-
Less Tds = Rs 1,26,000/-
now tax liabilities is Rs 1,46,700/-

14. Anand

good artical

15. venkatesh

Thank you very much. very good information

16. Rajesh Sharma

Thank you sir it is very much usuful for me.once againc thank u sir…

17. Yugal

very good information sir, thank you so much…

18. niranjan

very-2 good article & its so useful for me

19. INTAZAR

GOOD ARTICLE VERY USEFUL FOR ME, THANKS

20. Dnyaneshwar

pls tell about how the estimation of income be calculated.