How to Compute Advance Tax

Step 1 Estimate income of current financial year

Step 2 Calculate tax on such income 

Step 3 Calculate surcharge, education cess, relief etc. as may be applicable

Step 4 Calculate net tax payable

Step 5 Deduct TDS / TCS / MAT credit

  Step 6 Calculate balance tax payable.

Note –

  If this balance tax payable is 10,000 or more, then only advance tax payable.



Round off of Income and Tax

Income shall be rounded off to nearest 100 and fraction of 100 to be ignored.

Interest is calculated on such rounded off figure


Advance tax in case of Casual income / Capital Gain Income

(1) Such income cannot be properly estimated by assessee

(2) Such income can’t be assumed as earned evenly throughout the financial year

(3) In this case advance tax estimate of different dates cannot be made correctly.

(4) In these cases, the assessee shall be liable to pay advance tax only after the date such income arises (due dates of advance tax before earning such income, relevant) [proviso to section 234C]

  1. Income Tax
  2. Advance Tax Computation

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 11 years. He also provides Accounts Tax GST Training in Delhi and Pune.