As per section 208 of the Income Tax Act 1961 a person shall be liable to pay advance tax if Tax Liability exceeds Rs. 10,000 after deducting the amount of TDS,TCS. Every Assesses shall estimate his Income and Tax Liability for any previous year and Income Tax so estimated shall be paid in advance in accordance with the manner given below.
|Advance Tax Due Dates||Advance Tax Installment Amount|
|On or before 15th June||Not less than 15% of advance tax liability|
|On or before 15th September||Not less than 45% of advance tax liability|
|On or before 15th December||Not less than 75% of advance tax liability|
|On or before 15th March||100% of advance tax liability|
Interest for default in payment of Advance Tax
Interest imposed under Section 234B:
Interest under section 234B is imposed if you make incomplete tax payments. It is also levied in case of a delay in the payment of advance tax. You must pay interest under Section 234B if you are liable to pay advance tax but have failed to do so. However, it is also imposed if you have paid advance tax but the amount is less than 90% of the assessed tax.
Interest imposed under Section 234C:
Interest under section 234C is imposed when there is a delay in payment of an instalment of advance tax.
You pay interest under Section 234C if,
1. Advance Tax is paid on or before 15th June is less than 12% of Assessed Tax
2. Advance Tax is paid on or before 15th September is less than 36% of Assessed Tax
3. Advance Tax is paid on or before 15th December is less than 75% of Assessed Tax
4. Advance Tax is paid on or before 15th March is less than 100% of Assessed Tax
Here’s how you calculate the interest for late payment of advance tax:
The interest on late payment is calculated at 1% simple interest on the tax amount due, calculated from individual cut off dates shown above, until the date of actual payment of outstanding taxes.