Pay advance tax by Dec 15 to avoid interest payout

IT IS CHARGED AT 1% PER MONTH FOR SHORTFALL OR DELAYS

- SAIKAT NEOGI

AS THE DEADLINE for paying the third instalment of advance tax is December 15, taxpayers must review their tax liability. Those benefiting from deferred payments must track their timing of income to remain compliant.

All taxpayers whose estimated tax liability, after reducing TDS/TCS, is more than ₹10,000 are required to pay advance tax. By December 15, 75% of the total tax liability must be paid in advance.

The Section 234C of the Income Tax Act deals with interest for deferment of advance tax instalments.

"If the taxpayer fails to pay the required percentages of advance tax by the quarterly due dates, the shortfall attracts interest at 1% per month for three months for the first three instalments, and 1% for one month for the March instalment," says Neeraj Agarwala, partner, Nangia & Company.

Deferred payments