Know the penalties if you happen to fail to pay advance tax by 15 March

The deadline for submitting advance tax is approaching. Any particular person whose estimated tax legal responsibility for the yr is ₹10,000 or extra is required to pay advance tax. The advance tax must be paid in 4 instalments within the monetary yr itself. The final date for paying the fourth instalment of advance tax is 15 March. Let’s perceive the right way to estimate advance tax and the penalties in case you don’t pay your advance tax in time. “A taxpayer ought to first estimate his present earnings and income-tax thereon shall be calculated on the charges in pressure within the monetary yr. Thereafter the estimated tax deducted or collected at supply will probably be deducted and the stability tax payable will probably be used to compute the advance tax legal responsibility,” stated Vivek Jalan, accomplice, Tax Connect Advisory Services LLP, a Chartered accountancy agency. Also Read | The churn is on on the Kota manufacturing unit The taxpayer will probably be chargeable for curiosity beneath Section 234B and 234C for default in fee of advance tax. Interest beneath Section 234B is levied if the taxpayer has not deposited advance tax or if the advance tax deposited is lower than 90% of the entire tax legal responsibility. The taxpayer will probably be chargeable for curiosity beneath Section 234B at 1% per thirty days or a part of the month from April until the date of fee of tax. Interest beneath Section 234C is levied, if advance tax paid in any instalment(s) is lower than prescribed proportion of instalment quantity as follows:

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The taxpayer will probably be chargeable for curiosity beneath Section 234C at 1% per thirty days or a part of the month for the interval of default. The interval of default is 3 months in case of shortfall in fee of 1st, 2nd and third instalment and for 1 month in case of shortfall of final instalment. Advance tax obligations will not be relevant on resident senior residents (aged above 60 years) who wouldn’t have earnings from enterprise or occupation. “Section 234B just isn’t relevant if the assessee has paid 90% or extra advance tax. If any change in earnings as a consequence of processing of return beneath part 143(1) or evaluation, the tax as per u/s 143(1)/assessed tax shall be taken as a substitute of tax as per return of earnings (ROI) for the calculation of curiosity beneath 234B. Hence you will need to estimate the earnings for the yr and advance tax with precision,” stated Jalan. Subscribe to Mint Newsletters * Enter a legitimate electronic mail * Thank you for subscribing to our e-newsletter.