When has tax to be paid and on what basis?
Yes, tax to be paid during the financial year on the basis of pay as you earn such payments have to be made in installments and are known as ‘Advance-Tax’ payments. However the liability for payment of advance tax arises only where the amount of such tax payable by the assessee during that year is Rs. 5,000 or more.
Due Dates For Filing Tax Returns
What are due dates and % of installments for Advance Tax?
The due dates and the percentage of installments of Advance Tax for assessees other than Companies are as below
|Due Date of installments||Amount payable|
|1st on or before 15th September.||Amount not less than 30% of such advance tax.|
|2nd on or before 15th December.||Amount not less than 60% of such advance tax after deducting amount paid in earlier installment.|
|3rd on or before 15th March.||Entire balance amount of such advance tax.|
In case of companies, there are 4 installments of advance tax payable on or before 15th June (15%); 15th Sept. (45%); 15th Dec. (75%); & balance amount of Advance Tax payable by 15th March. Also, any amount paid by way of Advance Tax on or before the 31st March of that year, is treated as Advance Tax Paid during that Financial Year. The percentages of 45% and 75% specified with reference to dates of 15th Sept. and 15th Dec. include the amount of advance tax paid earlier during the year.
How is interest for short payment of advance-tax calculated ?
|INTEREST U/S. 234-B FOR SHORT PAYMENT OF ADVANCE TAX|
|Shortfall in payment of Advance tax of more than 10%.||Simple interest @ 1% for month or part thereof is chargeable w.e.f. 1st April of the Assessment Year to the date of determination of income u/s. 143(1) or regular assessment u/s 143(3) on the assessed tax. ‘‘Assessed tax’’ means the tax on the total income determined under sub section (1) of section No. 143 or on regular assessment u/s 143(3), as reduced by the amount of tax deducted or collected at source.|
How is interest for deferment of advance-tax calculated?
Interest for deferment of advance-tax is calculated in the following manner.
|(A) INTEREST U/S. 234-C FOR DEFERMENT OF ADVANCE TAX (Non Corporate assessees)|
|1 If no advance tax is paid or the advance tax paid in 1st installment on or before 15th September is less than 30% of the tax payable on the returned income as reduced by taxes deducted at source.||Simple interest @ 1% p.m. is chargeable on the amount of shortfall for a period of 3 months.|
|2. If no advance tax is paid or if the advance tax paid in 2nd installment on or before 15th December is less than 60% inclusive of 1st installment of the tax payable on the returned income as reduced by taxes deducted at source.||Simple interest @ 1% p.m. is chargeable on the amount of shortfall for a period of 3 months.|
|3. If the advance tax paid on the current income on or before the 15th day of March is less than the tax due on the returned income||Simple interest @ 1% is chargeable on the amount of shortfall from the tax due on the returned income.|
|B. INTEREST U/S 234C FOR THE CORPORATE ASSESSEES|
|1. If advance tax paid on or before June 15th is less than 12%.||Simple interest @ 1% p.m. is chargeable on the amount of shortfall for a period of three months.|
|2. If advance tax paid on or before Sept. 15th is less than 36%.|
|Simple interest @ 1% p.m. is chargeable on the amount of shortfall for a period of three months.|
|3. If advance tax paid on or before Dec., 15th is less than 75%.|
|Simple interest @ 1% p.m. is chargeable on the amount of shortfall for a period of three months.|
|4. If advance tax paid on or before March 15th is less than tax due on returned income (100%).||Simple interest @ 1% is chargeable on the amount of shortfall from the tax due on the returned income.|
However, no interest is leviable if the short fall in payment of advance-tax is on account of under estimation or failure to estimate the amount of capital gains or any income from winnings from lotteries, crossword puzzles, races, and other games including an entertainment program on television or electronic mode, in which people compete to win prizes etc., and the assessee has paid the tax on such income as part of the remaining instalments of advance tax which are due or if no instalment is due, by 31st March, of the Financial Year.
What are the documents to be enclosed with the return?
The documents to be enclosed with the return are as follows:
1. Acknowledgment slip in duplicate.
2. Statement of Computation of Income and Tax.
3. Ensure that Challan Identification Number (CIN) is mentioned in your Income-tax Challan. Attach copy of the acknowledgment of Challan.
4. Attach original T.D.S. Certificate in Form No. 16 or 16A or 16AA as applicable.
5. Certificates/Receipts of payment of insurance premium, provident fund, purchase of NSCs, new equity shares, mutual fund, NSS, medical insurance, donations etc. in support of deductions/rebates claimed. Requisite evidence where ever prescribed by law in support of your claim for any deduction/exemption, must be attached alongwith the return. Failure to do so may deprive you of the deduction and such evidence, even if produced later may not be entertained by the Assessing Officer.
6. Certificate of interest on housing loan from the lender, in support of deduction from house property income.
7. Other documents/statements as specified in the return itself and in support of income.
8. Quote your PAN clearly and correctly.
9. In case the assessee has applied for PAN but has yet not received allotment, a copy of PAN application form filed earlier and its acknowledgment should be enclosed with the return.
10. The name of the employer needs to be mentioned. Salaried employees to mention whether they are pensioners/Sr. Citizens.
11. Details of bank account to be mentioned to help in issue of electronic refunds.
It may, however, be noted that the new return forms are not required to be filed in duplicate and no annexures are to filed with such forms.
How is interest calculated for non-payment of advance tax?
The Income Tax Act provides for charging of interest for non- payment/short payment/deferment in payment of advance tax which is calculated as below:
(i) INTEREST U/S 234A: For late or non furnishing of return, simple interest @ 1% for every month or part thereof from the due date of filing of return to the date of furnishing of return, on the tax as determined u/s 143(1) or on regular assessment as reduced by TDS/advance tax paid or tax reliefs, if any, under Double Tax Avoidance Agreements with foreign countries.
(ii) INTEREST U/S 234B: For short fall in payment of advance tax by more than 10%, simple interest @ 1% per month or part thereof is chargeable from 1st April of the assessment year to the date of processing u/s 143(1) or to the date of completion of regular assessment, on the tax as determined u/s 143(1) or on regular assessment less advance tax paid/ TDS or tax reliefs, if any, under Double Tax Avoidance Agreements with foreign countries.
(iii) INTEREST U/S 234C: For deferment of advance tax. If advance tax paid by 15th September is less than 30% of advance tax payable, simple interest @ 1% is payable for three months on tax determined on returned income as reduced by TDS/TCS/Amount of advance tax already paid or tax relief, if any, under Double Tax Avoidance Agreement with forgiving contribution. Similarly, if amount of tax paid on or before 15th December is less than 60% of tax due on returned income, interest @ 1% per month is to be charged for 3 months on the amount stated as above. Again, if the advance tax paid by 15th March is less than tax due on returned income, interest @ 1% per month on the shortfall is to be charged for one month.
(iv) INTEREST U/S 234D: Interest @ 0.5% is levied under this Section when any refund is granted to the assessee u/s 143(1) and on regular assessment it is found that either no refund is due or the amount already refunded exceeds the refund determined on regular assessment. The said interest is levied @ 0.5% on the whole or excess amount so refunded for every month or part thereof from the date of grant of refund to the date of such regular assessment.
Who has to apply for PAN?
The following persons should apply for allotment of PAN in Form 49A-
– Every person whose assessable income exceeds the maximum amount which is not chargeable to tax or any person carrying out business or profession whose total sales/turnover is likely to exceed Rs 5,00,000 in a year.
– A person who is required to furnish return under sub-section (4A) of section 139.
– An employer who is required to furnish return of fringe benefits tax.
– The Central Government has power to specify by notification any class or classes of persons by whom tax is payable under the Income-tax Act or any tax or duty is payable under any other law for the time being in force.
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Content in this Article
- Due Dates For Filing Tax Returns
- How is interest for short payment of advance-tax calculated ?
- How is interest for deferment of advance-tax calculated?
- What are the documents to be enclosed with the return?
- How is interest calculated for non-payment of advance tax?
- Who has to apply for PAN?
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