1. What is Advance Tax
If you have to pay Rs 10,000 or more in taxes for a financial year, prepaid taxes may apply to you. Advance Tax means paying your taxes on the due dates provided by the revenue department. If you do not pay your taxes in advance or you do not pay in full, you may be liable to pay interest under section 234B.
Frequently Asked Questions
Interest under Section 234B
Interest under section 234B applies where: Your tax debt after deducting TDS in the financial year is over Rs 10,000 and you have not paid any taxes in advance. OR You have paid in advance, but prepaid taxes are less than 90% of the 'checked tax'. In any of the above cases, interest under section 234B will apply. Interest is calculated at 1% in Assessed Tax under Advance Tax. Half a month is shortened to a full moon. Interest rates are also abbreviated in such a way that any fraction of a hundred is ignored.
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