Taxpayer is required to pay an Advance tax in the current Financial year if his tax liability of the previous Financial year was more than Rs. 10,000/-. Income-tax department has provided quarterly due dates for payment of advance tax in case of individual taxpayers.
Other key points for Interest U/s. 234B:-
- Interest is payable at 1% of the tax liability.
- The period for which interest is calculated will start immediately from the 1st day of April and end on the respective quarter due date.
- This interest is compulsory. Hence it cannot be reduced or waived by any Income-tax authority.
- If the taxpayer fails to pay Advance tax installment for respective quarter, then interest U/s. 234B is charged automatically. Hence, Income-tax department is not required to intimate taxpayer about payment of this interest.
- If the taxpayer pays excess Advance tax in any quarter, then this excess amount can be used for calculation of Advance tax installments for other quarters.