The article talks about advance tax. The article provides answers to a couple of important questions related to advance tax. These questions are: who is expected to pay advance tax, what happens if you neglect to pay advance tax, the schedule to file advance tax and how to file advance tax.
Advance tax applies to those individuals, who have additional source of income other than salary such as income through capital gains, interest on investments, lottery, rent on property or self-employed individuals and those who have their own business and whose tax liability crosses Rs. 10,000 per year. If you do not pay advance tax on time, then you will be charged at the rate of 1 per cent simple interest a month.
Taxpayers will be entitled to a refund and an interest on that refund in lieu of an extra amount of tax paid by them. Interest at the rate of 0.5 per cent per month.
For depositing advance tax, you can visit any bank that has been empanelled by the Income Tax Department. Around 30 banks have the authority to accept Income Tax payments. These include State Bank of India, ICICI Bank, HDFC Bank, Indian Overseas Bank, Indian Bank, and other scheduled banks.
Taxpayers can also exercise the option of online payment through the I-T department or the National Securities Depository site.
The article points out that the benefit of paying advance tax in accordance with the schedule is that you get rid of the 1 per cent monthly fine.
Source : Businessworld