We are newly setup Company Called VenVina Ltd. We have no idea of advance tax. Kindly brief us regarding who should pay advance tax and what is the consequences of non payment of advance tax?

Advance tax refers to ‘Tax payable in advance during the financial year in respect of an assessee’s current income.

Advance Tax provisions are not applicable in the following cases:

1. Tax Payable is less than Rs.10,000.
2. Resident Senior citizen without business income.
3. Business Income u/s 44AD (Presumptive Basis).

Procedure for computing Advance Tax:

1. An Assessee has to first estimate his current income(under five heads of income after applying the provisions).
2. The Assessee shall then compute the income tax payable on his current income at the rates in force in the financial year.
3. The tax so calculated shall be reduced by the amount of tax which has been actually deducted at source.

Consequences when advance tax is not paid:

1. Interest u/s 234B for default in payment of advance tax i.e.,1% per month or part of month.
2. Interest u/s 234C for deferment of advance tax i.e.,1% per month for a period of 3 months.