How to Calculate & Pay Advance Tax?
Advance tax means income tax should be paid in advance instead of lump sum payment at year end. It is also known as pay as you earn tax. These payments have to be made in installments as per due dates provided by the income tax department.
Who should pay Advance Tax?
Salaried,freelancers and businesses– If your total tax liability is Rs 10,000 or more in a financial year you have to pay advance tax. Advance tax applies to all tax payers, salaried, freelancers, and businesses. Senior citizens, who are 60 years or older, and do not run a business, are exempt from paying advance tax.
Presumptive Businesses– Taxpayers who opt for presumptive scheme where business income is assumed at 8% of turnover are exempt from advance tax for FY 2014-15 and FY 2015-16.
Presumptive income for Businesses for FY 2016-17 – Starting financial year taxpayers who opt for presumptive scheme have to pay whole amount of their advance tax in one installment on or before 15th March. If they pay all of their tax dues by 31st March that is also ok. Starting FY 2016-17. businesses with turnover of Rs 2 crores or less can opt for this scheme.
Presumptive income for Professionals for FY 2016-17– Starting FY 2016-17, this scheme has been extended to professionals such as doctors, lawyers, architects etc if their gross receipts are 50 lakhs or less(Section 44ADA). Such taxpayers have to pay advance tax as per quarterly installments.
Read in detail about presumptive taxation here
Want a CA to calculate and help pay your advance tax dues?
Due Dates for payment of Advance Tax
FY 2017-18 & FY 2016-17
For both individual and corporate taxpayers
| Due Date | Advance Tax Payable |
|---|---|
| On or before 15th June | 15% of advance tax |
| On or before 15th September | 45% of advance tax |
| On or before 15th December | 75% of advance tax |
| On or before 15th March | 100% of advance tax |
For taxpayers who have opted for Presumptive Taxation Scheme – Business Income
| Due Date | Advance Tax Payable |
|---|---|
| by 31st March | 100% of advance tax |
For taxpayers opting for presumptive taxation having business income from plying, hiring or leasing of goods carriages Section 44AE
| Due Date | Advance Tax Payable |
|---|---|
| On or before 15th June | 15% of advance tax |
| On or before 15th September | 45% of advance tax |
| On or before 15th December | 75% of advance tax |
| On or before 15th March | 100% of advance tax |
For FY 2014-15 and FY 2015-16
| Due Date | For corporate taxpayers | For individual taxpayers |
|---|---|---|
| On or before 15th June | 15% of advance tax | – |
| On or before 15th September | 45% of advance tax | 30% of advance tax |
| On or before 15th December | 75% of advance tax | 60% of advance tax |
| On or before 15th March | 100% of advance tax | 100% of advance tax |
Our CAs will calculate your advance tax liability so you can pay your dues on time.
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