Should I Pay Advance Tax or Self Asses Tax?

Hello,
Let’s assume I am a salaried person and and my employer pay the Taxes as TDS . Now I also have profitable income from F&O. Let’s also assume I fall under 30% tax bucket.
So, should I pay Advance Tax or Self Asses Tax for F&O income at each quarter end or can I pay the entire tax at the the time of ITR filing at the end of Financial year.
If I need to pay pay tax at each quarter end which type of tax should I pay.

@Sakshi_Shah1 can you help?

Hey @Debabrata_Mandal

If your net tax liability i.e. tax liability after TDS credits, for a financial year exceeds INR 10,000, you must pay Advance Tax in 4 quarterly installments. There is an interest penalty in case the Advance tax is not paid before the end of the financial year.

If the tax liability for a financial year exceeds taxes paid including TDS and Advance Tax, you must pay Self Assessment Tax before filing of the Income Tax Return.

Read more about Advance Tax

In your case, since you are earning income in the financial year, you must pay Advance Tax. Follow these steps:

  • Calculate Tax Liability for the quarter on all your incomes including salary and F&O profits
  • Deduct TDS Credit
  • Pay advance tax on or before the due date as per the installments
  • If you fail to pay advance tax, you must pay remaining tax dues as self assessment tax along with applicable interest and penalty

Calculate Advance Tax Liability
https://tools.quicko.com/advance-tax-calculator/

1 Like

Thanks for all the details, it really help. By the way do you(Quicko) have any paid plan such as I share all of the income and they calculate everything for me also guide me when I have to pay and what should I pay. @Sakshi_Shah1 @Nireka

1 Like

Hey @Debabrata_Mandal

Glad we could help.
If you need help with the calculation and payment of Advance Tax, you can schedule a meet with a tax expert here - Calculate and Pay Advance Tax

You can connect with our tax experts to get any personalized assistance for your financial situation with MEET


as per the rule one should pay the advance tax per each quarter for the financial tax liability of the year .

query : what if the first 3 quarters the income is nil and the 4th last quarter the income is 50 lakhs ?

@Sakshi_Shah1
@Nireka
@Surbhi_Pal

Hey @HIREiN,

One has to estimate their total income and advance tax needs to be paid on the same. If you defer in making payment of the advance tax, interest u/s 234C will be levied.

what if in case of the following scenario :

e.g. :

if the estimate p.a. income is nil for the entire year . BUT . suddenly i won the lottery of 50 lakhs in the last month of the year .

?

Hey @HIREiN,

In the case of a lottery, TDS u/s 194B is applicable at the rate of 31.2%. The tax will be deducted by the prize distributor at the time of payment.

You can read more on Income Tax on winning lottery here!

Hope this clarifies!

yes . but the query is .

50 lakhs earned in the last month of the year . and NO advance tax had been paid ever in the entire year ?

Hey @HIREiN,

Except in the case of income from business and profession, interest will not be levied if the advance tax is paid before the due date in the last quarter. However, if the income is from business or profession, interest u/s 234C will be levied.

Hope this helps!