Udit Rana
Advance Payment due date is approaching fast as due date for September Quarter for Payment of advance tax is 15th September 2015, so I thought it appropriate to discuss provisions related to payment of advance tax and consequences of late payment, Short Payment or non payment of advance tax. The article discusses about to whom the provision is applicable , due date, quantum of advance tax payable and how Interest is calculated in case of non payment or Short Payment of advance taxes.
Advance Payment of Income Tax
As per Section 207, every person should pay Income Tax in advance but as per Section 208, advance tax is exempt if tax payment during a particular year is less Rs 10000 .
As per Section 211, advance tax is to be paid in the manner given below :
a) When assesseee is Company .
| Upto 15th June of Previous Year | 15% of tax payable |
| Upto 15th September of Previous Year | 45% of tax payable |
| Upto 15th December of Previous Year | 75% of tax payable |
| Upto 15th March of Previous Year | 100% of tax payable |
- b) When assesseee is person other than a Company .
| Upto 15th September of Previous Year | 30% of tax payable |
| Upto 15th December of Previous Year | 60% of tax payable |
| Upto 15th March of Previous Year | 100% of tax payable |
If any assesseee has defaulted in payment of advance tax then Interest shall be charged u/s 234C @ 1% per month for a period of 3 months on the amount of default in each installment but in the last installment Interest shall be charged for one month only.
Any amount of Income tax paid upto 31st March of previous year is called Advance tax and any tax paid after 31st March is called Self-assessment tax .
If advance tax paid is less than 90% of tax payable then assessee shall be required to pay Interest u/s 234B also @1% per month or part of a month for the period starting from 1st April of Assessment Year upto the date of payment .
If any assessee has paid Income tax after the last date of filing of Return of Income in that case, Interest shall be charged u/s 234A also @1% per month or part of a month for the period beyond the last date of filing of return of Income.
If any assessee has paid Income tax in excess it will be refunded with interest @0.5% or part of a month for the period starting from 1st day of AY upto the date of granting refund but if refund is less than 10% of tax liability, no Interest is payable .
Q1. ABC Ltd. Has estimated its tax payable to be Rs 12,00,000 for PY 2012-13 and paid advance tax accordingly but actual tax liability was found to be Rs 20,00,000 and the Company paid the balance amount on 10/12/2013.
Compute Interest payable u/s 234A/234B/234C ?
Solution: PY 2012-13, AY 2013-14
Due Date |
Tax on Estimated Liab. |
Tax on Actual Liab. |
Deficiency |
Interest u/s 234C |
15th of June |
180000 |
300000 |
120000 |
120000*1%*3=3600 |
15th of September |
540000 |
900000 |
360000 |
360000*1%*3=10800 |
15th of December |
900000 |
1500000 |
600000 |
600000*1%*3=18000 |
15th of March |
1200000 |
2000000 |
800000 |
800000*1%*1=8000 |
Total |
Rs 40,400 |
Interest u/s 234B ( from 1st April of AY upto DOP)
= 8,00,000*1%*9 months = Rs 72,000
Interest u/s 234A (from due date of return upto DOP)
= 8,00,000*1%*3 months = Rs 24,000
As per Section 234C, if any Company has paid advance tax at least 12% of actual tax liability upto 15th June of PY then no Interest shall be charged u/s 234C for such installment .
Similarly if the company has paid advance tax at least 36% of actual tax liability upto 15th September of PY then no Interest shall be charged u/s 234C for such installment .
Q2. ABC Ltd. Has estimated its tax payable to be Rs 9,00,000 and paid advance tax accordingly but actual tax liability was found to be Rs 9,50,000 and balance amount was paid by the Company on 10/12/2013.
Compute Interest payable u/s 234A/234B/234C ?
Solution: PY 2012-13, AY 2013-14
Due Date |
Tax on Estimated Liab. |
Tax on Actual Liab. |
Deficiency |
Rate of Tax onActual Liab. |
Interestu/s 234C |
15th of June |
135000 |
142500 |
7500 |
135000/950000*100=14.2% |
0 |
15th of September |
405000 |
427500 |
22500 |
405000/950000*100=42.6% |
0 |
15th of December |
675000 |
712500 |
37500 |
– |
37500*1%*3=1125 |
15th of March |
900000 |
950000 |
50000 |
– |
50000*1%*1=500 |
Total |
=Rs 1,625 |
Interest u/s 234B = 0 because Company has paid advance tax more than 90% of tax payable i.e., 900000/950000*100= 94.7%
Interest u/s 234A = 50000*1%*3= Rs 1,500
(Author can be reached at udit.rana16121994@gmail.com)
Yes you are right Mr. Mukeah but exemption is available only in case senior citizen don’t have any business income.
This benefit was introduced in Finance Act,2012 [Clause 80] and is applicable from 01.04.2012
Yes you are right Mr. Rajkumar but exemption is available only in case senior citizen don’t have any business income.
This benefit was introduced in Finance Act,2012 [Clause 80] and is applicable from 01.04.2012
i am a pensioner & draw my pension from a bank which also holds my Fixed deposits. I have no other income. As I am not giving Form 15 G or H, the bank deducts TDS from my pension & Interests on FDs. Now who is responsible to pay Interest on account of non-fulfillment of percentages of tax paid by Sep, Dec and Mar ? Me or bank and why ?
I have noted that the bank deducts about 60% of income tax due by March and the balance 40% is deposited by me as Self-assessment Tax, after I get Form 26AS, Form 16 & Form 16A, which is somewhere during end of June. Now who should bear the interest for the delay caused by my bank in giving Form 16 & 16A and delays in depositing my deducted tax with the govt thereby delaying generation of Firm 26AS till end of June ? I see no reason for me to bear the penal interest for delayed actions by my bank. Kindly clarify.
i am a pensioner & draw my pension from a bank which also holds my Fixed deposits. I have no other income. As I am not giving Form 15 G or H, the bank deducts TDS from my pension & Interests on FDs. Now who is responsible to pay Interest on account of non-fulfillment of percentages of tax paid by Sep, Dec and Mar ? Me or bank and why ?
I have noted that the bank deducts about 60% of income tax due by March and the balance 40% is deposited by me after I get Form 26AS, Form 16 & Form 16A, which is somewhere during en
Why have you left out Senior Citizens ?? They are not supposed to pay Advance Tax !