Advance Tax Computation & Planning

Advance tax is income tax paid in instalments during the year, before the return is filed. Under Section 208 of the Income Tax Act 1961, every person whose estimated tax liability for the year exceeds the prescribed threshold must pay tax in advance, and Section 211 sets the instalment schedule: 15% of the estimated tax by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March. Taxpayers under the presumptive schemes of Sections 44AD and 44ADA must pay the entire liability in one instalment by 15 March.

The system exists so that tax is collected as income is earned, not in one painful lump. For a business owner or professional, paying advance tax on schedule also protects cash flow — the instalments are sized to the income you have actually earned to date, which is why a mid-year computation matters. A sensible plan estimates income, deducts TDS already deducted from your receipts, accounts for advance tax paid by the company on your salary, and sets the instalments so you neither overpay nor miss a date.

If advance tax is ignored, the interest provisions do the punishing. Interest at 1% per month is charged under Section 234B of the Act on the shortfall of 90% of the assessed tax, and under Section 234C on the deferment of each instalment. Even a business that files its return on time ends up paying interest because the tax arrived late. These interest charges are not waivable on a whim — they are statutory.

This service is for salaried people with rental or capital gains income, business owners, professionals, freelancers and companies — anyone with a liability that crosses the advance tax threshold. We compute your estimated tax with the correct regime (old vs new), size each instalment, plan for capital gains and irregular income, and give you the challan details to pay on time.