Advance Tax Calculator for F.Y. 2018-19
How to Calculate Advance Tax with an Example
My additional income tax liability is more than INR 10,000 and I am not a senior citizen. Paying advance tax is a hassle for me. I don’t even want to pay penal interest for non-payment of Advance Tax. Is there any way I can avoid paying Advance Income Tax?
You can avoid paying Advance Income Tax if you report the additional income to the payroll department of your employer organisation in which case, the income tax on additional income would be deducted by the employer from your salary. However, while reporting the additional income with the employer, ensure that the amount reported is adjusted for the TDS on such income.
|Additional Income (in the form of interest on fixed deposit)||Tax Rate as per Highest Tax Slab||Tax if already deducted|
|Rs.1,00,000||35.54%||10% (Bank TDS)|
Now, Total payable tax on Additional income of Rs.1,00,000 = Rs.35,540
TDS deducted by Bank = Rs.10,000
Net payable tax = Rs.25,540
If you decide to report this additional income with the employer organisation, it would deduct income tax @ 35.54%. This would result in total TDS of 45.54% on the interest income. Hence, you will have to claim a refund at the time of tax filing. To avoid this, you may report additional income of only Rs.71,863 (instead of Rs.1,00,000) so that the total TDS on the income of Rs.1,00,000 equals the amount of income tax thereon.
Amount to be declared with the employer organisation as an additional income =1,00,000 *25.54/35.54 = 71,863 (rounded off)
If you declare this income, your taxes will be deducted by your employer as 71,863 x 35.54% = Rs 25,540.
How much Advance Tax am I required to pay by 15 December, 2018?
You are required to pay 75% of the Income Tax as Advance Tax by 15 December, 2018.
For example: Additional Income (Interest from Fixed Deposit) is Rs. 1,00,000
You fall under the tax slab of 30%
Total tax payable on additional income is (Rs.1,00,000 *35.54%) = Rs.35,540
TDS deducted by bank @ 10% is Rs.10,000
Net payable tax is total tax less TDS i.e. Rs.35,540 – Rs.10,000 = Rs.25,540
This net payable tax is supposed to be paid in 4 Quarters as mentioned in the below table:
|Quarters||Due Date||Tax Percentage||Total Tax Due||Tax to be paid in each Quarter|
|1st Quarter||15 June 2018||15%||3,831||3,831|
|2nd Quarter||15 September 2018||45%||11,493||7,662|
|3rd Quarter||15 December 2018||75%||19,155||7,662|
|4th Quarter||15 March 2019||100%||25,540||6,385|
Hence, by 15 December, 2018 you are required to pay Rs. 7,662.
Frequently Asked Questions
What will happen if I fail to pay Advance Tax?
In case you fail to pay Advance Tax or pay less tax than required, then you will have to pay interest and penalty under section 234C & 234B respectively of the Income Tax Act, 1961.
How can I know that I have already paid the Advance Tax?
If you have already paid the Advance Tax then it will reflect on your form 26AS within 2 to 3 days of making the payment.
If I am a resident senior citizen, will I be liable to pay advance tax?
According to section 208, a taxpayer, whose taxation liability exceeds Rs.10,000 for the previous year is liable to pay Advance Tax. However, according to section 207, a taxpayer is not liable to pay Advance Tax if such person satisfies the following conditions:
- The person is an individual
- The person is resident in India as per the Income Tax Act
- The person is of the age of 60 years or above
- The person is not having any income chargeable to tax under the head ‘Profit and gains of business and profession’
Is exemption from payment of advance tax for resident senior citizens under section 207 applicable to Hindu Undivided Families (HUFs)?
Only individual senior citizens can enjoy exemption from the payment of advance tax under section 207. Hence, HUFs are liable to pay Advance Tax.