Advance Tax and How to Avoid Interest on Advance Tax
By Dr. Lalit Kumar Setia | @drlalitsetia
| drlalitsetia@gmail.com | Created February 24, 2018 | Updated March 27, 2019
There are four due dates, let us understand how
interest will be computed.
(a) 15th June:
It is required to pay 15% of the advance tax up to 15th June of the financial year and if less than 15% of tax payable is paid. In 3rd month of financial year i.e. June, an individual should compute estimated income from all sources i.e. Salary, House Property, Business or Profession, Capital Gains, and Other Income. Deduct the exemptions and deductions, he or she would be entitled to i.e. from 80C to 80U.
On the amount of taxable total income, tax slabs should
be applied to compute the amount of tax liability including cess and surcharge
(if any).
15% of the tax liability
should be paid up to 15th June of the financial year either in form
of TDS or Advance Tax; otherwise simple interest @1% per month will be charged
for 3 months i.e. from 15th June to 15th September of the
financial year.
(ii) 15th September:
Upto 15th September, 45% of estimated tax liability should be paid in order to avoid the payment of interest @1% per month for 3 months i.e. from 15th September to 15th December of the financial year.(iii) 15th December:
Upto 15th December, 75% of estimated tax liability should be paid in order to avoid the payment of interest @1% per month for 3 months i.e. from 15th December to 15th March of the financial year.
*Copyright © 2018 Dr. Lalit Kumar. All rights
reserved.
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1. Corruption and Governance - Tools in the hands of Ruler
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