Advance tax payment is a concept where people with tax liability of more than Rs. 10000 in a year choose to pay the tax throughout the year in instalments rather than paying it altogether towards the year end. The government has a set schedule for advance tax payment if someone fails to adhere to it then they are liable to pay interest on advance tax. Let me tell you how it is calculated right here.
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Particulars |
Rate of Interest |
Period of Interest |
Amount on which interest is calculated |
If Advance Tax paid on or before June 15 is less than 15% of the Amount* |
Simple interest @1% per month |
3 months |
15% of Amount* (-)tax already deposited before June 15 |
If Advance Tax paid on or before September 15 is less than 45% of the Amount* |
Simple interest @1% per month |
3 months |
45% of Amount* (-) tax already deposited before September 15 |
If Advance Tax paid on or before December 15 is less than 75% of the Amount* |
Simple interest @1% per month |
3 months |
75% of Amount* (-) tax already deposited before December 15 |
If Advance Tax paid on or before March 15 is less than 100% of the Amount* |
Simple interest @1% per month |
– |
100% of Amount* (-) tax already deposited before March 15 |
You should note that
calculation of interest on late payment of advance tax is done on the amount which is unpaid as advance tax.
Read more:
When does one have to pay advance tax?
How to pay advance tax?
Who is liable to pay advance tax?
Authors Of The Question
How to calculate interest on late payment of advance tax?
Darsh
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May 11, 2022
2022-05-11T15:36:22+00:00 2022-05-12T10:46:51+00:00Comment
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Taxes
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