How to Calculate & Pay Advance Tax?

Pre-tax means that the income tax must be paid in advance rather than paying the total amount at the end of the year. It is also known as pay as you earn taxes. These payments must be made in installments according to the dates provided by the Income Tax Department.

Who should pay the advance tax?

Salaried, freelancers and businesses – If your total tax liability is 10,000 Rs or more in the fiscal year, you must pay a pre-tax. Pre-tax applies to all taxpayers, payers, independents, and businesses. Seniors, aged 60 or older, who do not run a company, are exempted from paying advance taxes.

Presumptive Businesses – Taxpayers who choose a hypothetical plan where business income is assumed at 8% of turnover less than 2 crores rupees are exempt from pre-tax 2011-11 tax.

Presumptive income for Businesses for FY 2016-17  – Taxpayers must start the fiscal year who choose the default plan to pay the full amount of the advance tax in a lump sum on March 15 or earlier. If they pay all their dues by March 31, that’s good too. The beginning of the financial year 2016-17. Companies with turnover of Rs 2 crores or less can choose for this scheme.

Presumptive Businesses– Taxpayers who opt for a presumptive scheme where business income is assumed at 8% of the turnover of less than ₹2 crore are exempt from advance tax for FY2017-18.

Presumptive income for Businesses for FY 2016-17 – Starting financial year taxpayers who opt for the presumptive scheme have to pay the whole amount of their advance tax in one installment on or before 15th March. If they pay all of their tax dues by 31st March that is also ok. Starting FY 2016-17. businesses with a turnover of Rs 2 crores or less can opt for this scheme.

Presumptive income for Professionals for FY 2016-17

– Starting in the fiscal year 2016-2017, this scheme has been extended to include professionals such as doctors, lawyers, architects etc. if their total income is 50 thousand or less (Section 44ADA). These taxpayers must pay an advance tax in quarterly installments.

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Due Dates for payment of Advance Tax

FY 2017-18 & FY 2016-17

For both individual and corporate taxpayers

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