Advance Tax/Self Assesment Tax and Interest u/s 234B and 234C

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If you are a salaried person there is tax deduction at source (TDS), which takes care of the tax payments for your salary. At the same time, there will be additional liabilities for income like interest on deposits, bonds and even capital gains which might require you to pay Advance Tax. Advance tax has to be paid in several installments in September, December and March. Self-assessment tax is the difference between the tax paid and the tax payable.You can figure out the self-assessment tax amount when you make the final income tax calculation. There is no specific date for paying this tax but it has to be done before you file your income tax return so that no further amount of tax remains to be paid.

While computing advance tax, income-tax on the current income has to be first determined and the tax on such income has to be determined. As per section 208, advance tax shall be payable in every case where the amount of tax payable by the assessee during that year is in excess of Rs. 5,000. As per section 211, advance tax is payable by companies in four instalments and by non-corporate assessees in three instalments. In cases of corporate assessees, advance tax is payable as under:

Due date of instalment Amount payable
On or before 15/6 Not less than 15%
On or before 15/9 Not less than 45%
On or before 15/12 Not less than 75%
On or before 15/3 The whole amount or 100%

If an assessee fails to pay the amount as above or if the amount paid falls short of the amount payable as under, he would be liable to interest @ 1% p.m. for a period of 3 months with respect to the first three instalments and for one month for the fourth instalment.

In the case of a non-corporate assessees, advance tax is payable in three instalments as given below:

Due date of instalment Amount payable
On or before 15/9 Not less than 30%
On or before 15/12 Not less than 60%
On or before 15/3 The whole amount or 100%

If an assessee either fails to pay the whole of advance tax or where the advance tax paid by him is less than 90% of the assessed tax, he shall be liable to interest @ 1% per month (@ 1.25% up to 7-9-2003) or part of the month from the 1st April of the assessment year to the date of determination of total income u/s. 143(1) and where regular assessment is made, to the date of such regular assessment. No interest is payable if the advance tax paid is 90% or more of the assessed tax.

Find more @ http://www.vipca.net/interest-defaults-payement-advancetax-interest-payable.php