Advance tax is payable when estimated tax for the financial year exceeds the threshold prescribed under the Income-tax Act. The computation is an estimate of total income for the year — including salary, business results to date, expected capital gains, and other income — reduced by TDS already deducted and by eligible deductions, then spread across the statutory instalment dates.
Working papers compare year-to-date books or management accounts with the previous year, adjust for known one-off items, and recalculate the instalment whenever a material transaction occurs. Interest under sections 234B and 234C is computed on the same sheet so that the cost of under-estimation is visible before the instalment date.
For individuals with only TDS on salary and interest, the exercise may be limited to checking whether additional payment is required after AIS is reviewed mid-year. For businesses, the estimate is updated after each quarter close. Form 15G/15H and lower-deduction certificates, where relevant, are factored into the cash-flow of tax rather than treated as separate paperwork.
The year-end computation then starts from these quarterly estimates instead of from a blank sheet, which keeps the ITR, advance-tax challans, and interest workings in one trail.