Advance tax is the tax that has to be deposited to the Income Tax Department during the year without waiting for the end of the year. Every person whose tax liability for a financial year exceeds INR 10,000 has to pay it on an installment basis. Income from all the different heads is added to calculate the advance tax.
Steps to compute Advance Tax:
- Login with your broker & visualize your P&L > Refer to your capital gains & business income for FY21-22
- Go to Old vs New Regime page and enter your income situation. You will have to add your capital gains and business income manually in reference to your P&L for FY21-22.
- Add all your estimated incomes through all income heads on the dashboard.
- Add deductions on the dashboard.
- Add all your taxes paid through the year.
- Tax liability will be computed as per both regimes.
- Assess your advance tax liability if the resulting tax liability is more than 10,000.
Advance tax is paid on a quarterly installment basis. The due dates for these quarters are every 15th of June, September, December, and March. From the total amount of tax, 15%, 45%, 75%, and 100% need to be paid every quarter.
The advance tax page on the dashboard shows the advance tax that is due every quarter based on the income situation entered. The dashboard shows the breakdown in terms of tax payable, tax credits, the outstanding amount, and the interest attracted every quarter.
The outstanding amount should be paid every quarter so by the end of the year when filing taxes, there is no accumulated liability that has attracted interest u/s 234C. This dashboard should be used as a planner to pay advance tax every quarter by the pay option and the challans should be collected.