1. When Does This Apply?
- When the taxpayer calculates their own advance tax liability(not based on the Income Tax Department’s demand).
- Applies to individuals, businesses, and professionalsliable for advance tax.
2. Steps for Self-Calculation of Advance Tax
Step 1: Estimate Total Income for the Financial Year (FY)
- Include all income sources:
- Salary (if applicable)
- Business/Profession income
- Capital Gains (short-term & long-term)
- House Property (rental income)
- Other Income (interest, dividends, etc.)
Step 2: Compute Gross Tax Liability
- Apply the applicable tax slab rates(including cess).
- Consider special rates for capital gains, lottery income, etc.
Step 3: Deduct Eligible Tax Reliefs & Rebates
- Section 87A rebate(if taxable income ≤ ₹5 lakh).
- Deductions (80C, 80D, etc.)if not already considered in TDS.
Step 4: Subtract TDS/TCS & MAT/AMT Credit (if any)
- Reduce tax already deducted (TDS from salary, interest, etc.).
- Adjust for Minimum Alternate Tax (MAT)/AMT creditif applicable.
Step 5: Check if Balance Tax > ₹10,000
- If remaining tax liability > ₹10,000, advance tax applies.
Step 6: Pay Advance Tax in Instalments (Section 211)
| DUE DATE | % PAYABLE (CUMULATIVE) |
| 15th June | 15% |
| 15th Sept | 45% |
| 15th Dec | 75% |
| 15th March | 100% |
3. Example of Self-Assessment
Case: Mr. X (Freelancer with Multiple Income Sources)
- Estimated Income (FY 2024-25):
- Freelance Income: ₹8,00,000
- Rental Income: ₹3,00,000
- Interest Income: ₹50,000
- Total Income:₹11,50,000
- Tax Calculation:
- Tax on ₹11.5L (New Regime): ₹82,500 + 4% cess = ₹85,800
- Less:TDS on Interest (₹5,000)
- Net Tax Payable:₹80,800
- Advance Tax Instalments:
- 15th June:15% of ₹80,800 = ₹12,120
- 15th Sept:45% (₹36,360) – ₹12,120 (already paid) = ₹24,240
- 15th Dec:75% (₹60,600) – ₹36,360 (paid so far) = ₹24,240
- 15th March:100% (₹80,800) – ₹60,600 = ₹20,200
4. Key Points to Remember
✔ Re-estimate if income changes – If earnings increase/decrease, revise instalments accordingly.
✔ Interest Penalty (Sec 234B & 234C) – Late/non-payment attracts 1% monthly interest.
✔ No need for intimation – Taxpayer computes & pays without formal submission (unless AO demands).
✔ Presumptive Tax (Sec 44AD/44ADA) – Full payment by 15th March only.
5. Consequences of Incorrect Calculation
- Underpayment:Interest under Section 234B & 234C.
- Overpayment: Refunded later with interest (if applicable).
