Advance Tax Calculator

Section 208 of the Income Tax Act, of 1961, requires all taxpayers to pay advance tax. These provisions apply if your projected tax payable is over ₹10,000. You can use an advance tax calculator to check and evaluate your advance tax liability. 

You have to pay this tax in four installments on or before the 15th day of the last month of a quarter to avoid penalties. Using the calculator, you can determine the advance tax amount you need to pay to avoid interest penalties under sections 234B and 234C.

An advance tax calculator is an online tool through which you can compute the estimated tax on your taxable income. The calculator will then use this estimate to give you the advance tax amount you need to pay every quarter. 

 

You can access this tool on the official Income Tax Department website or other platforms that provide the calculator.

Here are the steps you must follow when using the advance tax calculator on the Income Tax Department website: 

• Step 1: Choose the ‘Advance Tax Calculator’ 

• Step 2: Select the type of taxpayer you are (like individual, HUF, Firm, LLP, or others)

• Step 3: Input the required income, deduction, and exemption details 

• Step 4: Click on the ‘Calculate’ button to know your advance tax amount for every quarter

Here is the process you need to follow to manually calculate your estimated tax and advance tax installment amount: 

1. Calculate Gross Total Income (GTI)

Estimate your GTI by calculating your income under various heads. This includes Salary, Profits and Gains from Business and Profession, Income from House Property, Capital Gains, and Other Sources. 

2. Compute the Net Taxable Income (NTI)

To calculate NTI, use the mathematical formula: 

NTI = GTI – Deductions Available Under Chapter VI-A

 

So, subtract tax deductions under sections 80C, 80D, 80E, 80E, and 80EE from gross total income to get the net taxable income.

3. Get the Final Advance Tax Amount

Apply the tax rate on the net taxable income as per your tax slab to get your estimated tax liability. Then, add the applicable surcharge and cess and subtract the TDS. The final amount that you get is your net tax liability.

 

If it is above ₹10,000, you need to pay advance tax as per the following table:

Note: Under the ‘Advance Tax Instalment Amount’, subtract the tax rate from the 2nd quarter with the amount of advance tax already paid. 

 

If you are not well-versed with the rules and regulations of the Income Tax Act, use the advance tax calculator to ensure you pay the right taxes. This tool provides an estimation of advance taxes based on the latest Finance Act. Once you evaluate your advance tax liability, you can pay it online on the e-filing portal.