The taxpayer is required to pay Advance tax in the current Financial year if his Advance tax liability is Rs. 10,000/- or more. Income-tax department has provided quarterly due dates for payment of advance tax in case of individual taxpayers.
Interest under section 234B is payable for non/short payment of advance tax.
Interest u/s 234B is payable as follows:
Rate of Interest
Period of Interest
Amount on which Interest is calculated
Simple interest @1% per month or art of the month
from 1st April of Assessment year till actual date of payment
Total tax payable less Advance tax paid
Other key points for Interest U/s. 234B:-
- This interest is not applicable if 90% or more of Advance tax payable has been paid.
- Simple Interest of 1% per month or part of a month of the Advance tax short paid.
- This interest is compulsory. Hence it cannot be reduced or waived by any Income-tax authority.