Understanding of Advance Tax

For Financial year 2023-24 let’s assume Person A through his job earns Gross annual income as 24L. Through F&O trading from April 1 2023 to June 14 2023 the Profits earned after deductions are 50K. The employer of Person A has estimated tax and started deducting 36000 as tax every month. Now what should be the Advance tax that should have been paid by June 15 2023?

You can use the link to calculate.


Advance tax are to be paid in 4 installments ie… by 15th June - 15%, 15th Sept - 45%, 15th Dec - 75% and last on or before 15th March - 100%

Assuming you are salaried, you don’t have to worry about the taxes on your salary part. However for other earnings like the F&O you mentioned which amounts to 50K, you would have to pay tax at 30% slab rate as you are already in the 30% tax bracket. If you haven’t already paid the advance taxes you would have to pay 30% + 4% or something education cess on 50K + 1% interest on the advance tax you didn’t pay. Better consult a CA or better check while filing ITR what is the due amount. :slightly_smiling_face:

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This is where it gets confusing. In that calculator it takes into account the salaried income too and calculates advance tax. So should I pay Advance tax on both salary and business income ? My employer already estimated the tax I am supposed to pay for the salaried income in this FY and monthly tax deduction happens accordingly. So still I should pay advance tax on that? Also should the Advance tax on business income must be paid taking into account the estimated profit I am supposed to make in that financial year and then calculate 31.2% tax on that and then 15% of that by June etc? If someone can help me with clean numbers step by step on how all this works it would be great. Thanks in advance.

Brother you cannot pay the advance tax now, advance tax is to be paid for the ongoing year. Like for the current year if you have made any extra money other than salary say 50k till June (from 1st april till june month) then calculate lumsum how much you would earn for the entire year and then calculate the tax amount and pay the advance tax.


Now for the past year just file your ITR, fill in all the details. Add the F&O profits after deducting all necessary charges and just pay whatever the tax amount is to be paid as shown in the ITR portal.

Also for the current year if you pay advance tax and at the end of the year if you end up making less than your estimated amount then no need to worry, just file your itr with the actual profits and the excess tax would be credited back with interest.

Yes, it will consider all income you put in it and work out an advance tax schedule. You need to deduct taxes already paid by employer (TDS) and pay remaining advance

Yes, you need to estimate income for entire year.

I will try explaining with example, but again this is just ball park numbers to explain the concept. Better consult a CA if you are in doubt

Taking your example, Total salary 24 lakhs, company deducting 36K as tax every month, 50K profit from F&O.
Assuming you will have similar performance through out year, F&O income for full year 2 lakhs.

Adding all this numbers in tax calculator (Not considering any other deduction for simplicity) this is what you will get as tax liability

By 15 Jun - you are expected to pay 74,880, you have already paid 72K as TDS (36K * 2 months) so pay remaining 2880 as advance tax before 15 Jun

By 15 Sep - liability 2,24,640, already paid Rs. 182,880 (Advance TaxQ1 + 3 months TDS) so pay remaining

And so on.

This numbers are not exact because there might be some deductions, which would change the calcs. But this is the concept.

Hope this helps.

To clarify, my question has nothing related to filing ITR for FY 22-23. Just wanted to sharpen my understanding of Advance tax concept. I know Advance tax should be paid for the ongoing year :slight_smile: . Cheers

Wonderfully explained. Thank you Akash :slight_smile:

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