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Due Date And Interest Payment of Advance Tax

Today we are discuss on the due date and interest payment of Advance tax  by the assessee. meaning of advance tax, due date of advance tax,Interest and penalty of non payment of Advance tax.

Meaning of Advance tax?

There are various form of Income Tax  like TDS, Self assessment tax and Advance tax. Advance tax is a form of Income tax to be paid in advance.

Why Advance tax?

Government is collecting the income tax by way of self assessment tax at the year end.bu income is accrued in the whole year. Government view is too pay the tax as and when you have earned the income that why advance tax is collected by the government.

How to calculate Advance tax ?

Advance tax is Calculated on estimated basis.

Due dates of Advance tax?

Advance tax is paying in the installments. Due dates of  advance tax payment installments are differ from assesses to assesses.

Due Date of Advance Tax For Non Corporate Assesse (Individual, Proprietorship,HUF, partnership firm LLP)
: Advance tax Amount is divided into Three Instalments.

Due Date of Advance tax Instalment Amount Payable
On or before the 15th Sep. of Financial year 30% of Tax On Returned Income
On or before the 15th Dec. of Financial year 60% of Tax On Returned Income
On or before the 15th March of Financial year 100% of Tax On Returned Income

 

Due Date of Advance Tax For Corporate Assesse (Private  limited, public limited company)

: Advance tax amount is divided into Four Installments.

Due Date of Advance tax Installment Amount Payable
On or before the 15th Jun. of Financial year 15% of Tax On Returned Income
On or before the 15th Sep. of Financial year 45% of Tax On Returned Income
On or before the 15th Dec. of Financial year 75% of Tax On Returned Income
On or before the 15th March of Financial year 100% of Tax On Returned Income

Failure to pay Advance tax?

Assessee is liable to pay interest to the government if not paid the advance tax on time.

How to Calculate Interest under section 234C ?

SECTION: 234C INTEREST FOR UNDER PAYMENT OR NON PAYMENT OF ADVANCE TAX INSTALLMENT

Every Assesse who is liable to pay advance tax has not paid the advance tax or under pay the advance tax installments then interest u/s. 234C is leviable.

Section 234C says that if the assesse has made under payment or non payment of advance tax instalments then interest @ 1% p.m. is leviable.

Here Tax on Returned Income refers to Total tax on returned income as reduced by Tax deductible at Source (TDS).

Period for which interest is leviable:

Interest is leviable for a period of three months for all installment except last installment & for the last installment interest is leviable for a period of one month only.

Amount on which interest is leviable:

Interest is leviable on the difference between the installment payable & installment paid.

The above section can be well understood with the help of below example:

Mr.Akshay: An Individual

Financial Year: 2013-14

Total Tax on Total Income: Rs.1200000/-

TDS Credit: Rs. 200000/-.

Tax on Returned Income= 1200000-200000= Rs. 1000000/-

Details of advance tax paid:

15th Jun, 2013:    Rs. 200000/-

12th Dec, 2013:    Rs. 300000/-

8th  Feb, 2014:    Rs. 250000/-

 

Interest is computed as follows:

Due Date Amount Paid up to due date Amount Payable Difference Interest Leviable
15th Sep. Rs. 200000/- 30% of Rs. 1000000=300000 Rs. 100000/- Rs.100000*1%*3=Rs. 3000/-
15th Dec. Rs. 500000/- 60% of Rs. 1000000=600000 Rs. 100000/- Rs. 100000*1%*3= Rs. 3000/-
15th March Rs. 750000/- 100% of Rs. 1000000=1000000 Rs. 250000/- Rs. 250000*1%*1= Rs. 2500/-
Total Interest Chargeable U/S. 234C Rs. 8500/-

 

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