Advance tax is a mechanism for taxpayers to pay their income tax liabilities in installments throughout the financial year, rather than in a lump sum at the end of the year. The calculation of advance taxes involves estimating the total annual income, determining the applicable tax rates, and computing the tax liability for each installment.

To calculate advance taxes, taxpayers need to estimate their total annual income from all sources, including salary, business income, capital gains, interest, and other taxable sources. They also need to consider deductions, exemptions, and tax credits available under the Income Tax Act to arrive at their taxable income.

Once the taxable income is determined, taxpayers can use the applicable tax rates and tax slabs to compute their income tax liability for the financial year. It’s essential to consider any changes in tax laws or rates that may affect the calculation.

After computing the total tax liability for the year, taxpayers can divide this amount into installments and pay them by the due dates specified by the Income Tax Department. The due dates for advance tax payments are typically spread out over the financial year, with specific percentages of the total tax liability payable in each installment.