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Know The Penalty In Case You Miss March 15 Advance Tax Payment Deadline

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Today is the deadline (March 15) to pay-off the last advance tax installment for the income earned in the ongoing financial year 2020-21. Advance tax is required to be paid by any person whose estimated tax liability for the year is Rs. 10,000 or more. And if one fails to make the advance tax payment, there is imposed penalty on the due taxes.

 

 Know The Penalty In Case You Miss March 15 Advance Tax Payment Deadline

As per the Income tax law, the advance tax is to be paid in installments of 15 percent, 45 percent, 75 percent and 100 percent, on or before June 15, September 15, December 15 and March 15, respectively.

How to estimate advance tax?

The specified assessees need to first estimate their income for the current year and income tax liability on it shall be computed basis the applicable rates for the given year. Then the estimated tax deducted or collected at source will be deducted and the remaining tax payable will be used for computing the advance tax liability.

Penalty in case you don't pay advance tax within the stipulated timeline

For default in advance tax payment, the taxpayer will be charged interest under Section 234B and 234C. Under section 234B, interest is charged in a case if the taxpayer has not paid advance tax or if the advance tax paid is below 90% of the total liability. And the interest shall be 1% per month or part of the month from April till the tax payment date.

Interest under Section 234C is charged, if advance tax deposited in any installment is below the stipulated percentage of installment amount as below:

Advance tax installment date Interest under Sec 234C will be levied if advance tax deposit is less than below percentage:

Advance tax installment dateInterest under Sec 234C will be levied if advance tax deposit is less than below percentage
1st installment- By June 1512%
2nd installment- By Sept 1536%
3rd installment- By Dec 1575%
4th installment- By March 15100%

Under Section 234C, interest will be charged at 1% per month or part of the month for the default period. In case there is a deficit in advance tax payment in the 1st, 2nd and 3rd installment then the period of default is 3 months and in case of shortfall in last installment, 1 month is taken as the default period.

 

Also, note resident senior citizens aged more than 60 years are not liable to pay advance tax if they do not have income from business or profession.

GoodReturns.in

Read more about: advance tax income tax tax
Story first published: Monday, March 15, 2021, 13:15 [IST]
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