In a real practice, does business pays advance tax whose tax is more than Rs.10000 ( is it voluntary or mandatory?)
Thanks in advance.
As per section 208, every person whose estimated tax liability for the year is Rs. 10,000 or more, shall pay his tax in advance, in the form of “advance tax”.
As per sec. 234B, if an assessee who is liable to pay advance tax, but not paid the same or if the advance tax paid by him is less than 90% of the assessed tax, he is liable to pay simple interest at 1% every month or part of a month.
If the advance tax paid is in underestimated installments or if it is not paid at all, Section 234C gets attracted. Interest is calculated on the difference between the installment paid and installment payable. Rate of interest is @ 1% p.m. for a period of 3 months for every deferment. But, for last installment on 15th March, interest would be 1% for 1 month only.
Thus, the payment of liable advance tax is mandatory.
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