Alert: Advance tax payment deadline extended to today

If you are salaried and also have other sources of income (like capital gains, casual income and the like), 15 December is an important date for you. But if you’ve missed the deadline, you need not worry, the deadline has been extended to 17 December. The same stands true if you are a business owner or a professional. Why so? It is your one of your deadline to pay advance tax as per the income tax (IT) department rules. If you don’t know what that means or are not sure what we are talking about, read on.

Advance Tax: In simple words, it is the tax you need to pay in advance, or before the financial year ends on 31 March. For instance, for financial year 2012-13 (assessment year 2013-2014), advance tax is paid in instalments in 2012-13 itself. It’s a tax which you pay on your current income less the tax deducted at source (TDS). So, in short, you need to pay advance tax on income on which you don’t pay TDS. So, on your salary, for which the tax is deducted by the employer, you need not pay advance tax.

You pay: Not everyone has to pay advance tax. The government has exempted senior citizens, who do not have any kind of business income, from paying advance tax as per the latest Union Budget announcement. If you are an individual, salaried or otherwise, and have an advance tax liability of Rs 10,000 or more in a single financial year. If you are salaried and also have income from other sources, such as income from house property, capital gains from investments like stock or mutual fund schemes, interest income from fixed deposits (FDs) and the like, you need to pay advance tax.

Deadlines: Individuals have to pay advance tax in three instalments: amount not less than 30 percent by 15 September; not less than 60 percent by 15 December and the balance by 15 March. Consequences: If you fail to pay advance tax, or if there is a shortfall in the amount you paid, you will have to pay interest rate on the defaulted amount. Penal interest is 1% simple interest per month on the defaulted amount for three months (15 September). The penalty is the same (1%) if you missed the second deadline (15 December), that’s when you need to pay 60% of your tax liability. If you miss the final instalment too, you will have to pay 1% simple interest on the defaulted amount for every month until the tax is fully paid.

Extra Amounts: If you pay more advance tax than which was due, you need not worry. The IT department will refund, the amount. If the amount of advance tax you paid was more than 10 percent of the applicable advance tax amount, they will pay you 0.5 percent interest per month.

How to pay: You can pay through tax portals or use the authorised online or offline banking channels such as net banking, demand draft and at automated teller machines. You will need to fill ITNS-280 form to pay your advance tax. More details available on the National Securities Depositories Ltd website. Now that we have reminded you about the 15 December deadline, pay the tax if applicable. After all, it’s best to stick to deadlines when it’s about taxing taxes.