In advance tax(India), What happens if estimated tax is incorrect than actual?


  • Salaryman with income 6L
  • 1 fixed deposit
  • saving account interest is less than 10000 Rs
  • No business income/stcg/ltcg/or any other income.

If i bought stocks from recognized exchange, today for 5000 Rs, and decide to sell it in Feb 2022, no matter what. I estimated that i will be selling stocks for an amount, for which i will have net tax liability (excluding TDS from salary, which is already paid by employer) of 20000 Rs. Based on that, I paid advance tax installments as per the percentages for three times.
So, the installments will be,

  1. 15% of 20000 = 3000 Rs.
  2. (45% of 20000 ) - current_paid = 9000-3000=6000.
  3. (75% of 20000) - current_paid = 6000.

Now, I have to pay remaining 5000 in fourth quarter.
But when i sell the stocks, the selling price was higher than my estimation, which increased my net tax liability to (assume) 100,000 Rs.

Now considering first advance tax pay, since 15% of 100000 = 15000 is greater than (already paid) 3000Rs,

  • will i face any penalty, if yes, then what would be my penalty OR how will the penalty calculated, in the above case ?
  • will i possibly receive any Notice from IncomeTax department ?
  • how should i pay tax the fourth time? is it different from normal process.
  • do i need to contract a lawyer/accountant for the fourth payment, eg: 3rd party audit?
  • say, if i use any online service for stock investment(eg, zerodha/upstox) for above case, can quicko, pay(or, show calculations for) tax and do the itr filing as well?

Hey, @Divya_Singhvi @Laxmi_Navlani @Kaushal_Soni can you?

Hi @Ivan

  • Yes if there has been deferment of advance tax, interest shall be levied u/s 234C which shall be 1% per month or part of the month on the amount deferred.
  • If you don’t pay the amount of interest and file your return then you may receive demand notice for the unpaid amount.
  • You should pay the balance amount of tax in the fourth quarter.
  • For payment of advance tax you don’t need to consult a lawyer/accountant. However, if you need help in the calculation of advance tax you can take the help of an expert
  • Yes Quicko can help you with the calculation of advance tax and ITR Filing.
    We’ll be happy to help.
    You can check out our Advance Tax Calculator, or reach out to us on Quicko | Contact Us so someone from our team can get in touch with you?

Hope this helps :slightly_smiling_face: