How to Calculate Advance Tax?

How to calculate advance tax:  Advance tax calculation is very simple as every layman can do it without difficulty. First of all, you should know that advance tax is paid in installments as we have discussed in previous article. Secondly, you should know that are you liable to pay advance tax, if yes, then this article is for you if not then you should read the article to know how to calculate advance tax. In this article we will discuss about how to calculate advance tax for individuals, HUFs, partnership firms, companies and others.

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.

Rates of advance Tax to calculate advance tax

The advance tax rates are calculated by the income tax slab for that relevant assessment year. Suppose if we assume today date to calculate advance tax, i.e. 25th June 2022 (As this date falls in the financial year 2022-23), then we will check the income tax slab for the A.Y. 2023-24.

Check Income Tax Slab

Penalty on Failure to Pay Advance Tax

The advance tax is mandatory for those, whose tax is more than Rs.10,000 (except senior citizens) 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.

How to calculate Advance Tax?

After calculating the entire tax on the income of the F.Y. 2022-23, 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.

20 thoughts on “How to Calculate Advance Tax?”

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

  2. 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

  3. 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

  4. 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 ?

  5. 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

  6. 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

  7. 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/-


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