How do I calculate my advance tax?

CA Vijay R Singh, FCA
Chartered Accountant · ICAI M.No. 153926 · FRN 136869W

Short answerEstimate your total income for the year, compute the tax on it (with cess), subtract the TDS/TCS already deducted — the balance is your advance tax, payable in the prescribed instalments. Revise the estimate each quarter as your actual income becomes clearer.

The basic method

Advance tax is just your estimated annual tax, paid in advance. Project your income from all sources (salary, interest, capital gains, business, rent), compute the tax under your regime including 4% cess, then subtract the TDS/TCS expected to be deducted. What remains is the advance tax to spread across the instalment dates.

Revise as you go

Because it is an estimate, you recalculate each quarter — a mid-year bonus or a capital gain changes the figure. Pay the cumulative percentage due by each date on your latest estimate. Capital gains that arise after a due date are accommodated in the next instalment without 234C interest for that item. Confirm the relief rules for late-year gains.

A worked example

Example: estimated income ₹18 lakh, tax (with cess) ₹2.5 lakh, expected TDS ₹1.5 lakh — advance tax = ₹1 lakh. You pay 15% by 15 June (₹15,000), 45% cumulative by 15 September, and so on. If you sell shares in December for a ₹5 lakh gain, you add that quarter’s tax to the December/March instalments. Our team can run the calculation and schedule it.

Income Tax

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This answer is general information for taxpayers, not tax advice. Tax rates, thresholds and forms change with each Finance Act — please confirm the current position for your own facts, or speak to us, before acting.