5 Simple Steps for Advance tax Calculation – For Individuals

Advance Tax is applicable for all assesses whose Tax Liability exceeds Rs. 10,000/- during the financial year

Advance tax should be paid in various installments.

Some clue on "How to" of DIY Advance Tax calculation-Individuals

Advance calculation for individuals is like filing the return of income, therefore involves similar steps.

Steps Involved

Step-1            Form 26AS of the individual is to be taken into account for calculating income. Take all incomes into consideration shown in the form 26AS on which TDS is deducted. Such income may not be of the whole year while calculating advance tax, therefore has to be projected for the whole year while calculating Advance Tax. Remember to also take TDS credit on projected basis for the whole year.

Step-2 Now see if there is any other income of the assessee during the year by coordinating with the individual or by examining his bank statements. Also, take into account previous years incomes while considering incomes of this year (some incomes accrue every year therefore, have to be taken into account every time).The incomes in step-2 are those on which TDS is not deducted, therefore not shown in 26AS.

Step-3 See the investments of the assessee to project the deductions under chapter VI-A like 80C, 80G etc.

Step-4 Also keep an eye on the surcharge applicable where total income exceeds the limits specified for applicability of surcharge in case of companies/firms.

Step-5 Once this is done and the total income is projected, then apply tax rates as applicable in the financial year for which tax is deducted and project the advance tax.