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What is Advance Tax? – Advance Tax Calculator

How to calculate advance tax?

Updated on :  

08 min read

Latest Update:
CBDT has issued a circular on 9th Sep 21 extending the timelines for certain direct tax compliances for AY 2021-22.
1. ITR Filing due date extension:
i) ITR filing by taxpayers not covered under audit is extended from 30th Sep 21 to 31st Dec 21
ii)  ITR filing for Tax audit cases is extended to 15th Feb 22 
iii) ITR filing for transfer Pricing is extended to 28th feb 22
iv) ITR filing of Belated or Revised Return for FY 20-21 is extended from 31st Dec 21 to 31st March 22

2. Furnishing Audit Report:
i) Due date to furnish the audit report is extended to 15th Jan 22
ii) Due date to furnish the audit report for transfer pricing cases is extended to 31st Jan 22

Union Budget 2021 Outcome
a. Exemption from ITR filing to senior citizens aged 75 years and above, earning only pension and interest income.
b. The income tax department launched pre-filled ITRs with additional details to simplify the return filing process.
c. The due date for filing belated and revised returns is reduced by 3 months. This also means that the IT department will have to process the returns and send a notice under section 143(1) by 31st December.

Advance Tax Calculator – Calculation of advance tax liability

Advance tax calculator is a Use this intuitive tool from ClearTax to calculate your advance tax liability

We will explain the calculation by way of an example. Ajay is a freelancer earning income from the profession of interior decoration. For the FY 2019-20, Ajay estimates his annual gross receipts at Rs 20,00,000. Ajay estimates his expenses at Rs 12,00,000. Ajay has deposited Rs 40,000 in PPF account. Ajay has also paid Rs 25,000 towards LIC premium. Further, Ajay has paid Rs 12,000 towards medical insurance premium. The professional receipts of Ajay are subject to TDS. Ajay estimates a TDS of Rs 30,000 on certain professional receipts for the FY 2019-20. Besides professional receipts, Ajay estimates an interest of Rs 10,000 on fixed deposits held by him. Ajay’s advance tax liability would be as below:

INCOME ESTIMATION FOR ADVANCE TAXAMOUNT (Rs)AMOUNT (Rs)
   
Income from profession:  
Gross receipts20,00,000 
Less: Expenses12,00,0008,00,000
   
Income from other sources:  
Interest from fixed deposit 10,000
GROSS TOTAL INCOME 8,10,000
Less: Deduction under section 80C  
Contribution to PPF40,000 
LIC premium25,000 
 65,000 
Deduction under section 80D12,00077,000
TOTAL INCOME 7,33,000
   
TAX PAYABLE 59,100
Add: Education cess @ 4% 2,364
  61,464
Less: TDS 30,000
TAX PAYABLE IN ADVANCE 31,464
Edit
ADVANCE TAX PAYMENTS 
Due dateAdvance tax payableAmount (Rs)
15th June15% of Advance tax4,700
15th September45% of Advance tax14,100
15th December75% of Advance tax23,600
15th March100% of Advance tax31,400

What is 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 instalments 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 taxpayers, 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 income for Businesses–The taxpayers who have opted for presumptive taxation scheme under section 44AD have to pay the whole amount of their advance tax in one instalment on or before 15 March. They also have an option to pay all of their tax dues by 31 March.

Presumptive income for Professionals– Independent professionals such as doctors, lawyers, architects etc. come under the presumptive scheme under section 44ADA. They have to pay the whole of their advance tax liability in one instalment on or before 15 March. They can also pay the entire amount by 31 March.

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 2019-20 & FY 2018-19 for both individual and corporate taxpayers

Due DateAdvance Tax Payable
On or before 15th June15% of advance tax
On or before 15th September45% of advance tax less advance tax already paid
On or before 15th December75% of advance tax less advance tax already paid
On or before 15th March100% of advance tax less advance tax already paid

For taxpayers who have opted for Presumptive Taxation Scheme under section 44AD & 44ADA – Business Income

Due DateAdvance Tax Payable
 On or before 15th March100% of advance tax

Our Tax Experts will calculate your advance tax liability so you can pay your dues on time.

Frequently Asked Questions

When should I pay advance tax

If your tax liability for a year after reducing TDS exceeds Rs 10,000, you will be liable for payment of advance tax

Is an NRI liable for payment of advance tax?

An NRI, who has an income accruing in India in excess of Rs 10,000, is liable for payment of advance tax.

I am a senior citizen having pension and interest income. Should I pay advance tax?

Resident senior citizens not having income from business or profession are not liable for advance tax.

Will I be penalized if I do not pay advance tax?

Non payment of advance tax will result in levy of interest under 234B and 234C of the Income tax Act, 1961.

Can I claim deduction under 80C while estimating income for determining my advance tax?

Yes. You can consider all these deductions while estimating your income for the year for computing your advance tax liability.

What happens if I miss the deadline for payment of the fourth installment of my advance tax i.e. on 15 March

You can still go ahead with payment of advance tax on or before the 31 March of the year. Such payment will still be treated as advance tax only.

How do I make an advance tax payment

Advance tax payment is made using Challan 280 just like any other regular tax payment. You may read our detailed article on online payment of income tax.

Why should advance tax payments be made?

Advance tax payments benefit both the government and the individual/organisation paying it. From the government’s perspective, it provides a continuous flow of income throughout the year. From the individual/organisation’s perspective, it reduces the year-end burden of paying taxes in a lump sum. Non-payment of advance tax could result in the taxpayer being liable to interest under the Income Tax law. Hence, timely payments of advance tax should be made.

How to check advance tax payment status?

To check the status of your advance tax payment challan, go to https://tin.tin.nsdl.com/oltas/index.html. Select CIN (Challan Identification Number) Based View. Then enter the required details being asked for, in order to view the status. You can also check the list of advance tax payments made by logging in to your income tax account at https://www.incometaxindiaefiling.gov.in/home and going to My account -> View Form 26AS (Tax Credit), and entering the financial year and type of view/download.

How to make advance income tax payment online?

To make advance tax payment online, follow the steps given below:

  1. Visit the Tax Information Network of the Income Tax Department of India at https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp
  2. Click on ‘Proceed’ under the CHALLAN NO./ITNS 280 option.
  3. Enter the tax applicable, types of payment, mode of payment, PAN, assessment year and other details mentioned in the challan.
  4. Ensure that once filled-in, you double-check all the data that you have entered.
  5. You will then be redirected to the bank’s website to complete the payment.
  6. After completing the payment, you will get a tax receipt on the next screen, on which you can see the payment details. You can see the BSR code and challan serial number on the right side of the challan. Save a copy of this tax receipt for future reference. You will need to enter the BSR code and challan number in your tax return.
How to write a cheque for advance tax payment?

Taxpayers can pay advance tax both online and offline. For offline payments, the challan can be downloaded at- https://www.incometaxindia.gov.in/Forms/107010000000345598.pdf Once downloaded, the details listed should be filled up, keeping in mind the following instructions-

  • A separate challan should be used for each type of payment.
  • Quoting of the Permanent Account Number (PAN) is mandatory. Quoting a false PAN may attract a penalty of Rs. 10,000/- as per section 272B of the Income tax Act, 1961.
  • Taxpayers should draw/issue the cheque/DDs towards payment of income tax as under –
    Pay _________________ (Name of the bank where the Challan is being deposited) A/c Income-tax.
  • Taxpayers should ensure that the bank’s acknowledgement contains the (1) BSR code of the bank branch, (2) Date of deposit of challan, and the (3) Challan serial number, as these details will have to be quoted in the Income Tax Return.
How to download advance income tax payment receipt?

To view the advance tax payment challan, go to https://tin.tin.nsdl.com/oltas/index.html. Select CIN (Challan Identification Number) Based View. Enter the required details, and click on ‘View’. Once the challan details are displayed on the screen, you can either print out the same or save a screenshot. Taxpayers can also download the advance tax payment receipt/challan by visiting the website of the bank through which advance tax payment was made. An option will be available to download the advance payment receipt.

All Articles

  1. Taxpayers may make an error in income tax payments such as wrong tax category, assessment year and so on. Taxpayers can correct the error in the tax challan through the bank or assessing officer.
  2. Know all about interest imposed under section 234A for late e-Filing of your Income Tax return. Find out how much interest to be paid in your case.
  3. Know all about interest imposed under section 234B for not paying advance tax. Find out how much interest to be paid in your case.
  4. Know all about interest imposed under section 234C for deferred payment of Advance Tax. Find out how much interest to be paid in your case.
  5. Learn about Advance tax and who should pay it. Find out how to calculate advance tax and due dates for payment of advance tax.
  6. Learn about Advance tax and who should pay it. Find out how to calculate advance tax and due dates for payment of advance tax.