Advance Income Tax Payment Due Dates and Interest on Late Payment of Advance Tax

If the Income Tax Liability of any taxpayer is more than Rs. 10,000 in a financial year, then he is liable to pay such tax in installments during the year itself rather than paying this tax at the end of the year. This tax which is payable during the year is called “Advance Tax” or “pay as you earn tax” as tax is liable to be paid at the time the income is earned i.e. during the year rather than paying this tax at the end of the year.  

For Individuals with Salary as the sole source of income, Advance Tax would be taken care of by the TDS deducted by the employer at the time of payment of salaries as reflected in Form 16.Senior Citizens not having any Business Income are also exempted from the payment of Advance Tax (Introduced by Budget 2012)

For all taxpayers earning income from any source other than salary, Advance Tax is payable in installments as explained below.

Payment of Advance Tax

With effect from 1st June 2016, All assessee’s including Companies(excluding Taxpayers who opted for presumptive taxation scheme of section 44AD) , Advance Tax is liable to be paid as per the following schedule

Due Date of Installment	Taxpayers (other than those who opted for presumptive taxation scheme of section 44AD)	Taxpayers who opted for presumptive taxation scheme of section 44AD
On or before 15th June	Not less than 15% of the Advance Tax Liability	Nil
On or before 15th Sep	Not less than 45% of the Advance Tax Liability	Nil
On or before 15th Dec	Not less than 75% of the Advance Tax Liability	Nil
On or before 15th Mar	100% of the Advance Tax Liability	100% of Advance Tax

Payment of Advance Income Taxis to be made through Challan No. 280 by selecting Advance Tax (100) as the type of payment as shown below:-

Interest on Late Payment of Advance Tax(Income Tax Department)

Interest under section 234C is levied, if advance tax paid in any installment(s) is less than the required amount. In other words, Income Tax is not payable as per the above schedule, Interest is liable to be paid for late payment of tax as follows

1. Interest under section 234C – Interest @ 1% per month is payable if the tax is not paid as per the above schedule i.e. for Deferment in Installments of Advance Tax
2. Interest under section 234B – Interest @ 1% is payable if 90% of the tax is not paid before the end of the financial year i.e. for Default in Payment of Advance Tax

“No  levy  of  interest  if  shortfall  in  payment  of  advance  tax  is  due  to  capital  gains  or winning from lottery, etc. Interest under section 234C is not levied, if, the shortfall in payment of advance tax is due to  failure  to  estimate  the  amount  of  capital gains  or  income  referred  to  in  section 2(24)(ix)  (i.e.  winning  from  lotteries,  crossword  puzzle,  etc.)  or  income  from  a  new business  and  the  taxpayer  pays  the  required  advance  tax  on  such  income  as  a  part  of immediate following installments or till 31st March, if no installment is pending. ”

For Computing Interest see Examples Provided by Income Tax Department

Note:

In case Advance Tax paid by the Assessee is more than his actual Income Tax Liability, he can claim Refund of Income Tax by furnishing the details of tax deposited in the Income Tax Return

For More Information see Income Tax Department Guidlines

Thank you friends next time we will meet in TDS Due Dates post..........Bye....

 

--All the above contents only for Public reference and not for any other purpose. Therefore, I can not take any responsibility for the results or consequences of any attempt to use or adopt any of the information presented on this blog--- 

Thanks & Regards

S. Praveen Kumar Reddy.

(source:Income Tax Department Guidlines)