Chartered Accountant
1375 Points
Joined August 2012
Yes. Advance tax provisions are applicable for Capital Gain, but with some changes.
Interest u/s 234C in case of CG:
Unlike normal income, capital gain income cannot be anticipated in advance. Hence, interest u/s 234C shall not apply to such capital gain on retrospective basis. This implies that advance tax liability on capital gains shall begin only after the date capital gain arises.
Let me clarify the same with an example:
Suppose Normal income is Rs.100 + Capital Gain (arose in January 2017) Rs.30.
Then Advance tax liability shall apply only for quarter 4 on 100% of capital gains. Hence interest @ 1% on Rs. 30 shall be payable in case of failure to pay advance tax by 15th march 2017.