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. 12th July, 2015, then we see the income tax slab for the A.Y. 2016-17. And we estimate the income for F.Y. 2015-16.

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 will also cover the topic of “interest on failure to deposit Advance Tax” in detail later. So we advise to new visitors that subscribe for your email ID or like our Facebook page to latest updates on your favorite topic.

After calculating the entire tax on the income of the F.Y. 2015-16, split it according to the percentage of installment. See our article Advance Tax Installment and Due Dates.

For Example:

Mr. X calculate/estimate his income Rs.3,87,000/- for F.Y. 2015-16.

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.

1st installment by 15th Sept, 2015 – (30% of 12050/-) = 3615/-

2nd installment by 15th Dec, 2015 – (30% of 12050/-) = 3615/-

3rd installment by 15th March, 2015 – (40% of 15862/-) = 4820/-

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. We will cover this topic in our next article. So stay with us and subscribe your email id.

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.

1. 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/-

2. 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

3. 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

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. 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. 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