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).

You might be interested in:

1. Tax Deduction at Source for Deductors

2. Advance Tax and How to Avoid Interest on Advance Tax
3. How to save money from being covered under taxes (Tax Saving Options)?
4. Accounts Administration and Prevention of Mal-practices
5. Government Accounting and Audit Mechanisms
6. Workshop on Taxation Matters (Income Tax Computation and submission of e-TDS)
7. Duties of DDOs in Taxation Matters (Income Tax and Goods and Services Tax)
8. Corruption and Governance - Tools in the hands of Ruler
9. Important Questions on Goods and Services Tax

Advance Tax and How to Avoid Interest on Advance Tax

Advance Tax and How to Avoid Interest on Advance Tax

-Dr. Lalit Kumar Setia*

Advance Tax:
The income tax act contains provisions of paying taxes along with the earning revenues. Every year the companies not only pay advance tax but also advertise in newspapers their amounts being paid as advance taxes in order to show their commitment to earn the revenues. 

The advance tax means the amount of income tax which is paid in advance and settled from the tax payable amount at the end of the year. The advance tax is required to be paid as per the due dates provided by the income tax department. 

The advance tax is applied to all individuals except senior citizens who donot run any business. If the tax liability of an individual become Rs. 10000 (Ten Thousands) or more, in a financial year; it becomes mandatory to pay advance tax. 

In case of businesses, only the presumptive businesses with business income less than Rs. 2 Crores are exempt from advance tax. The due dates for the payment of advance tax are respectively 15^th June, 15^th September, 15^th December, and 15^th March for payment of 15%, 45%, 75% and 100% of advance tax. 

In case, the income tax and advance tax is not paid on time; interest is imposed by Income Tax Department u/s 234 (A), 234 (B), and 234 (C). 

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).

You might be interested in:

1. Tax Deduction at Source for Deductors

2. Advance Tax and How to Avoid Interest on Advance Tax
3. How to save money from being covered under taxes (Tax Saving Options)?
4. Accounts Administration and Prevention of Mal-practices
5. Government Accounting and Audit Mechanisms
6. Workshop on Taxation Matters (Income Tax Computation and submission of e-TDS)
7. Duties of DDOs in Taxation Matters (Income Tax and Goods and Services Tax)
8. Corruption and Governance - Tools in the hands of Ruler
9. Important Questions on Goods and Services Tax