Advance tax

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NILAM

NILAM (Querist)
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11 March 2016 Hello Sir,

How to calculate advance tax? and who is liable for advance tax?

Yogesh Shukla

Yogesh Shukla (Expert)
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13 March 2016 Who is it applicable for?
If in a financial year your total tax liability exceeds Rs 10,000 you will be required to pay Advance Tax. Do remember to include all heads of income calculating Advance Tax.

Here's how you can calculate your Advance Tax:-

1) Estimate your Freelancing Income: Add the expected income from your clients. If you have ongoing agreements which lay out payment terms, use those for estimating your income.
2) Subtract Expenses: From this income, you are allowed to reduce expenses which are directly related to the freelancing work. Rent of your workplace, internet, telephone costs, depreciation on computers, travel expenses etc. Read more here: Income and Expenses of a Freelancer
3) Add up all other Income: Add expected income from other heads like House Property, Interest Income, etc. Apply the latest Income Tax Rates to calculate your tax due. Do remember to reduce any TDS that may have been deducted from your Income.
4) If the remaining Tax Due exceeds Rs 10,000, you are required to pay Advance Tax as per the due dates mentioned below.

Due Dates of payment of Advance Tax:

For Individuals
On or before 15th June -
On or before 15th September - Up to 30% of advance tax payable
On or before 15th December - Up to 60% of advance tax payable
On or before 15th March Up to - 100% of advance tax payable

Every assessee shall be liable to pay advance income-tax during any financial year in respect of his total income of the financial year, if the amount of advance income-tax payable exceeds ten thousand rupees.

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