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: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: TDS :: VAT RATES :: due date for vat payment :: list of goods taxed at 4% :: empanelment :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: Central Excise rule to resale the machines to a new company :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARD
 
 
News Headlines »
 How to file income-tax returns online
 How Income Tax Returns Are Scrutinised
 All About New Income Disclosure Scheme to make Demonetisation successful
 Your deposit may draw income tax notice
 Accepting payment under IDS 2016
 New disclosure scheme could see 50% tax and 4-year limit on cash use for unaccounted deposits
 Pay 50% tax on unaccounted deposits, or 85% if caught, says Modi government
 Deadline to pay property tax in old currency extended
 Cabinet clears amendments to Income Tax Act
 Have you got interest on your income tax refund?
 New income tax rules to curb unaccounted cash

Pay your advance tax on time to avoid penalty
August, 29th 2016

Advance tax is the income tax required to be paid in advance on estimated income of a tax year. The onus of estimating the taxable income and discharging the due tax liability on such income in advance, is on an individual tax payer.

Advance tax is the income tax required to be paid in advance on estimated income of a tax year. The onus of estimating the taxable income and discharging the due tax liability on such income in advance, is on an individual tax payer.

Advance tax provisions are applicable if the tax liability to be discharged by a tax payer after reducing tax deducted at source (TDS) from his total tax liability is more than R10,000.

There is a relief available to the resident individuals who are over 60 years of age and do not have income chargeable under the head ‘Profits and Gains of Business or Profession’, for not paying any advance tax.
Individuals have to estimate their income for the full financial year as early as June 15, as compared to the previous first instalment date of September 15.

This change brought by Union Budget 2016 has been seen as an accelerated revenue collection measure for the government. There will be another compliance date to remember and missing it will lead to interest implications.

The payment of advance tax can be done by using the tax payment challans (ITNS 280) at the designated bank branches or through the online portal of the income tax department.

If advance tax is not paid or the amount of advance tax paid is less than 90% of the final tax liability, the tax payer shall be liable to pay simple interest @1% per month from first day of assessment year (year following the tax year) up to date of deposit of tax & interest.

For example, if balance tax for the tax year 2016-17 is paid in the month of July 2017 then, the interest would be required to be paid for four months (April 2017 to July 2017).

If the payment of advance tax is deferred beyond the due dates, interest @1% per month, for a period of three months, will be payable for every deferment, except for the last instalment of March 15 where it will be 1% for one month.

So, it is really beneficial for an individual tax payer to estimate the income to be earned and the taxes payable at the beginning of the tax year.

It is advisable to pay the advance tax on time so as to avoid the last minute outflow of funds at one go.

Else, you may end up paying absolutely avoidable penal interest for such delay.

One should estimate the total income at the start of the tax year by keeping the last year’s income as a benchmark, e.g. salary, capital gains, interest on savings bank account and term deposits. This exercise would need to be done before every instalment date so as to factor in any changes.

The writer is partner & India
Mobility Leader, EY. Inputs from
Shanmuga Prasad, senior manager, EY

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

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