Advance tax is usually payable when your tax liability exceeds Rs. However, if you forget or delay the payment, you are penalized in the form of interest under section B of the Income Tax Act.
You also must pay similar penalties under section A and C.
Are you always late on filing your income tax returns? You may be in danger of attracting this penalty. The due date for filing the returns is usually before July 31 of every following assessment year. For instance, Geeta has a total tax outstanding of Rs. She is now late by 6 months on the tax payment.
Geeta will now have to pay Rs. The interest will continue until March 31st that is the end of the assessment year.
If you make incomplete tax payments, you are more likely to attract this type of penalty.
It is also levied in case of a delay in the payment of advance tax. You must pay interest under Section B if you are liable to pay advance tax but have failed to do so. The TDS deduction amounted to Rs.
On March 25, Priya paid Rs. However, Priya only made a payment of Rs.
Hence Priya will have to pay an interest penalty on the assessed tax. Hence Priya is liable to pay Rs.
Calculation of Interest under section C: Want to avoid the penalties under the A, B and C? Ensure you make your tax payments on time and in full.