Due date to pay income tax for individuals is approaching fast and everyone is gathering papers to file income tax. Did you know, you may have lost 1% every month by the habit of last moment. Section 234A, 234B, 234C requires a tax payer to pay interest for delay in paying income tax if taxpayer’s total tax liability is more than Rs 10000.
If a tax payer has not paid income tax before due date of filing income tax return then he/she has to pay an interest of 1% every month after due date. Due date for 2012 is 31-July-2012.
If a tax payer has not paid his due income tax by 15-March-2012 then he has to pay an interest of 1% on the pending income tax every month after March. The more you delay filing in your income tax, the more you will accrue the liability to pay interest.
If a tax payer has not paid his due income tax regularly in the financial year then he has to pay an interest of 1% on the pending income tax at that time until the time to pay next (3 months). An individual is required to pay
- 30% of total tax liability by 15-Sep
- 60% of tax liability by 15-Dec
- 100% of total tax liability by 15-March
If your employer and you are not careful enough to make these payments on time then you are liable for interest on unpaid income tax at the rate of 1% every month.
On the face, the law seems appropriate to encourage tax payers to pay their taxes on time. However, the provision of pardoning interest if total tax liability is Rs 10000 needs change. A novice person may not be able to make correct calculation of total tax upfront and a small amount of tax may remain. Law should pardon interest if the total tax due under section 234B and 234C is below a threshold.