Advance Tax and How to Avoid Interest on Advance Tax (Part-2)

Advance Tax and How to Avoid Interest on Advance Tax

-Dr. Lalit Kumar Setia*

Continued from......

(iii) Section 234 (C):

In case of advance tax, as earlier stated the due dates are 15^th June, 15^th September, 15^th December, and 15^th March respectively for 15%, 45%, 75%, and 100% of the advance tax to be paid by all taxpayers except the businessmen who opt for presumptive income u/s 44AD of income tax act. 

For such taxpayers, it is must to pay the 100% advance tax upto 15^th March of the financial year. In case, the amount of advance tax is not paid on the due dates, it becomes outstanding and late payment is required to be paid along with ‘interest on deferred payment of advance tax’. 

Again the interest rate @1% per month is charged as interest on deferred payment of advance tax. Firstly, it is required to compute the estimated taxable income in the starting of the financial year and compute the tax liability on the basis of which amount of advance tax is computed. 

Estimated Tax Liability is tax on Estimated Taxable Income from All Sources. 

Continued.....

*Copyright © 2018 Dr. Lalit Kumar. All rights reserved. Dr. Lalit Kumar is working as Assistant Professor (Faculty of Financial Management), HIPA, Gurugram (Delhi-NCR), India (Asia).

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