Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: VAT RATES :: ACCOUNTING STANDARD :: due date for vat payment :: VAT Audit :: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: cpt :: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: list of goods taxed at 4% :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4%
 
 
General »
  Withdrawal of Legal Tender Character of the existing Bank Notes in the denominations of ₹ 500/- and ₹ 1000/- (Updated as on November 30, 2016)
 Cases for tax scrutiny will be selected by machines
 Time to revisit 1997 direct tax rates, says P Chidambaram
 Lok Sabha passes Bill to tax black money deposits post demonetisation
 Last day to pay property tax with old notes
 Income tax department asks IDS declarants to pay tax by 30 November
 Why PM Narendra Modi must beware of the breathtaking Arthakranti tax
 Japanese firms seek easing of restrictions on funding in India
 Tax on black money: How the cookie will crumble
 Income tax officials say raids on jewellers based on 'credible intelligence' proving fruitful
 Exchange window being misused, government forced to reduce limit to Rs 2000, says Arun Jaitley

Failure to pay advance tax attracts penalty
January, 25th 2011

Advance tax, as the name suggests, is nothing but taxes paid in advance on the estimated annual income. Advance tax, along with tax deducted at source (TDS) and self-assessment tax, constitute the three means by which income taxes are collected by the government. Since the government machinery needs constant flow of funds, it cannot wait till the year end for tax payers to compute their income and then pay taxes, hence the provisions for advance tax forms part of the Income Tax Act.

Advance tax needs to be paid by all individuals, irrespective of whether they are consultants, businessmen or salaried. However, the liability to pay advance tax arises only if the tax payable (after taking the benefit of TDS and other prescribed credits) is Rs 10,000 or more.

Individuals need to pay advance tax in three installments. To illustrate, if the tax on total estimated income for the year is Rs 1,00,000 and taxes estimated to be deducted at source from this income is Rs 60,000, the amount payable as advance tax would be Rs 40,000.

Failure to pay or any delay in payment of advance tax as above attracts mandatory interest of 1% per month.

In case of a salaried individual having no other sources of income, there is normally no need to worry on advance tax because his employer is obliged to deduct tax (payable on salary income after considering the deductions on account of investments) at source on his full salary.

The individual also has the option to declare any other income, for example rental income or capital gains, to his employer if he wants that income to be considered for deducting tax from his salary.

This saves the individual from the hassle of keeping track of the advance tax deadlines.

However, in case of an individual, having worked with two or more employers during the year, either parallel or sequentially, there may arise a situation that even in absence of any other income, the individual may be required to pay advance tax on his salary income.

This happens when, in absence of the details of salary earned from the other employer, the benefit of slab (Rs 160,000 for male, Rs 190,000 for resident female and Rs 225,000 for senior citizen) is allowed by each employer separately.

At the time of final income and tax computation, where the benefit of slab is taken only once, some tax may become payable which will need to be paid as self-assessment tax before filing the return.

To conclude, salaried people who have switched jobs during the year should furnish the required income details to their subsequent employers so that correct taxes are deducted and there are no shortfalls at the year end.

* The author is manager, Ernst & Young

Source: http://www.indianexpress.com/news/failure-to-pay-advance-tax-attracts-penalty/741781/1

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Careers

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions