Taxation

How to Calculate Advance Tax, Due Dates for A.Y. 2023-24

How to Calculate Advance Tax, Due Dates for Assessment Year (AY) 2023-24.

In India, advance tax is a system of paying income tax in advance, as and when the income is earned. It is also known as pay-as-you-earn tax. This means that the taxpayer is required to estimate his/her total income for the financial year and pay taxes on it in installments throughout the year.

The advance tax is applicable to all taxpayers, including individuals, companies, firms, and other entities. It is calculated on the estimated income for the financial year, and the taxpayer is required to pay it in installments on or before the due dates.

If the taxpayer fails to pay the advance tax on time or pays less than the required amount, he/she may be liable to pay interest under Sections 234B and 234C of the Income Tax Act, 1961.

The advance tax due dates for different installments vary based on the type of taxpayer and the type of income. For example, for individuals and businesses with income other than business or profession, the due dates for the four installments are 15th June, 15th September, 15th December, and 15th March. For businesses and professionals, the due dates are 15th June, 15th September, 15th December, and 31st March.

It’s important for taxpayers to calculate and pay the advance tax on time to avoid any interest or penalty charges. They can consult a tax professional or refer to the official income tax website of the Indian government for more information on advance tax.

Also Read-Challan 280-How to Pay Advance Tax Online or Offline? Due Dates

Advance Tax Due Dates for Assessment Year (AY) 2023-24

The advance tax due dates for Assessment Year (AY) 2023-24 in India are as follows:

  1. 15th June 2023: 15% of the estimated tax liability is due for individuals, taxpayers covered under the presumptive taxation scheme, and taxpayers opting for the presumptive taxation scheme under Section 44AD/44ADA.
  2. 15th September 2023: 45% of the estimated tax liability is due for individuals, taxpayers covered under the presumptive taxation scheme, and taxpayers opting for the presumptive taxation scheme under Section 44AD/44ADA.
  3. 15th December 2023: 75% of the estimated tax liability is due for all taxpayers.
  4. 15th March 2024: 100% of the estimated tax liability is due for all taxpayers.

Note: The advance tax due dates may vary based on the taxpayer’s status and type of income. It’s always advisable to consult a tax professional or refer to the official income tax website of the Indian government for updated and accurate information.

Also Check-Section 44ADA: A Simple Guide To Presumptive Taxation Scheme.

How to Calculate Advance Tax:

To calculate advance tax in India, follow these steps:

  1. Estimate your total income for the financial year: The first step in calculating the advance tax is to estimate your total income for the financial year. This includes income from all sources, such as salary, business, profession, capital gains, rental income, and other sources.
  2. Deduct eligible deductions: After estimating your total income, you can deduct eligible deductions under Chapter VI-A of the Income Tax Act, such as deductions for investments in PPF, NSC, and other tax-saving investments.
  3. Calculate taxable income: Once you have deducted eligible deductions, you will arrive at your taxable income.
  4. Determine tax liability: To determine your tax liability, you can refer to the income tax slab rates applicable for the financial year. For example, for FY 2022-23, the income tax slab rates for individuals are as follows:
    • Up to Rs. 2.5 lakhs: Nil
    • Rs. 2.5 lakhs to Rs. 5 lakhs: 5%
    • Rs. 5 lakhs to Rs. 7.5 lakhs: 10%
    • Rs. 7.5 lakhs to Rs. 10 lakhs: 15%
    • Rs. 10 lakhs to Rs. 12.5 lakhs: 20%
    • Rs. 12.5 lakhs to Rs. 15 lakhs: 25%
    • Above Rs. 15 lakhs: 30%

    Based on your taxable income, you can calculate your tax liability using the applicable slab rates.

  5. Calculate advance tax installments: After determining your tax liability, you can divide it into four installments and pay it in advance on or before the due dates. The due dates for the four installments vary based on the type of taxpayer and the type of income.

Note: It’s important to keep in mind that advanced tax calculations can be complex, and it’s advisable to consult a tax professional or use an online tax calculator to ensure accuracy.

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Hello, I am C.K. Gupta Founder of Taxgst.in, a seasoned finance professional with a Master of Commerce degree and over 20 years of experience in accounting and finance. My extensive career has been dedicated to mastering the intricacies of financial management, tax consultancy, and strategic planning. Throughout my professional journey, I have honed my skills in financial analysis, tax planning, and compliance, ensuring that all practices adhere to the latest financial regulations. My expertise also extends to auditing, where I focus on maintaining accuracy and integrity in financial reporting. I am passionate about using my knowledge to provide insightful and reliable financial advice, helping businesses optimize their financial strategies and achieve their economic goals. At Taxgst.in, I aim to share valuable insights that assist our readers in navigating the complex world of taxes and finance with ease.

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