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Tax checklist before 31 March

We recently did an article on why you should pay advance tax before the due date. You end up paying 1% interest per month if you don't. You can read that article here.


We highly recommend that you reach out to your Chartered Accountant or tax advisor before 15 March and pay appropriate advance tax. If your advisor has not been making you pay advance tax, might be time to run and hide - they are costing you between 8-16% in penal interest.

What's covered in this guide?


1. Advance Tax

2. Tax Saving Investments

3. Book your Income Tax Consultation



Advance Tax


Instalments of Advance Tax and Due-dates:

Tax-payers under the Presumptive Taxation Scheme:


Opting for the presumptive taxation scheme under Section 44AD/ Section 44ADA? In this case, you can skip the quarterly advance tax payment and pay tax only by March 15.

Instalment of Advance Tax and Due-date:


NOT PAYING ADVANCE TAX? PAY PENAL INTEREST:


If you do not make advance tax payments as per the above due dates, be prepared to pay interest on non-payment.


Interest under Section 234B:


Interest under section 234B is levied in the following two cases:

a. Where an Assessee, who is liable to pay advance tax, fails to pay such tax OR b. Where the advance tax paid by the Assessee is less than 90% of ‘Assessed tax’.


Interest under section 234B is levied on the amount of unpaid / shortfall in payment of advance tax computed as follows:

Amount liable for Interest: Interest under section 234B is levied on the amount of unpaid / shortfall in payment of advance tax computed as follows:


Rate of Interest: Simple Interest is levied at the rate of 1% for every month or for part of a month


Period for the levy of Interest:

Interest is levied from April 1 of the following Financial Year



Interest under Section 234C:


Interest under section 234C is levied, if the advance tax paid in any instalment(s) (as per the specified due-dates mentioned above) is less than the actual proportional tax payable.


Amount liable for Interest: Interest under section 234C is levied on the short paid amount of instalment(s) of advance tax.


Rate of Interest: Simple Interest is levied at the rate of 1% for every month or for part of a month


Period for the levy of Interest:

Interest is levied from due date till date of payment or end of the financial year, whichever is earlier.


Galactic Tip: Interest under section 234C is not leviable in respect of any shortfall in payment of tax due on returned income, where such shortfall is on account of the following:

  1. Capital Gains;

  2. Dividend income

In the above case, payment should be made by 31 March.


This is an extremely useful provision that allows you to pay advance tax only by the end of the financial year.


Ensure you are paying your advance tax on time - you could end up saving 8-16% per year. At a time when interest rates are at their lowest, why forego such a high amount in payments to the Government.


Advance Tax Pro-tip:


Don't forget that dividend is also taxable from FY 2020-21. Remember to include this in your computation of advance tax.



Tax Saving Investments


A detailed list of deductions is available here. 31 March is the last date for most tax saving investments. We'll cover some of the popular options below:

Section 80C


Limit - INR 1,50,000


Eligible Investments - PPF, ELSS, Life Insurance premium, Tax saving fixed deposits

Section 80CCD


Limit - INR 50,000


Eligible Investments - NPS

Section 80D


Limit - INR 25,000 (INR 30,000 if senior citizen)


Eligible Investments - Medical insurance premium


Don't forget - the clock is ticking.


Need help?


Book your Income Tax Consultation for FY 2020-21

Don't wait for the year to end. Don't wait for ITR filing season. Now is the time you can actually plan your taxes. If you come to us after the end of the financial year, it's about damage limitation


STEP 1 Download our Sources of Income File

Sources of Income_FY 2020-21
.xlsx
Download XLSX • 65KB

STEP 2

Fill up file with your sources of income

STEP 3

Send us the file at support@thegalacticadvisors.com

STEP 4

Sit back and relax as our team shares with you a personalized quote for your Income Tax Consultation within 24 hours!

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