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With a little over three weeks left in the current month, three important compliances related with income tax laws have to be fulfilled. Failure to do so would cost assessees.
These compliances include depositing the final instalment of advance tax, the last opportunity to file the income tax return of fiscal year 2020-21 and linking of PAN (Permanent Account Number) with the unique identity number Aadhaar. While March 15 is the date for the first compliance, March 31 is the date for the remaining two.
Advance Tax
According to Section 208 of the Income Tax Act 1961, every person whose estimated tax liability for the year is more than or equal to Rs 10,000, is liable to pay advance tax. Those who are excluded from paying advance tax are senior citizens who are above the age of 60, and those not having an income from business or profession.
One can pay the advance tax in four instalments by the 15thday of June, September, December and March. Fifteen per cent of the advance tax is payable on or before June 15. By September 15, it should be 45 per cent of payment, less the amount already paid. By December 15, it should be 75 per cent of advance tax less that already paid, and the balance amount by March 15. Non-payment of any instalment of advance tax will invite interest.
Advance tax is the income tax paid in advance for income earned in a particular financial year. Usually tax is to be paid when income is earned. Still, under the advance tax provisions, the payer has to estimate the income for the entire year. And, based on this estimate, tax is paid at specific time intervals. Here it is important that the tax payer estimates the income and then calculates the estimated tax on it to check whether he or she needs to pay the advance tax and how much.
Filing of ITR
The final deadline for filing ITR for FY 21 (Assessment Year 2021-22) for individuals whose accounts need not to be audited was December 31. Now, if one has not filed yet, then he/ she will have one last opportunity to do so by March 31 with penalty. According to Sundara Rajan TK, Chairman& Managing Partner at DVS Advisors, the assessee needs to pay late filing fees under Section 234F of Rs 5,000 (Rs 1,000 if the total income does not exceed Rs. 5 lakh) and interest under Section 234A.
PAN Aadhaar linkage
The 12th extension for linking PAN with Aadhaar will come to an end on March 31. Originally, it was mandatory to link Aadhaar with PAN from July 1, 2017. As on January 24, the total number of PANs linked with Aadhaar were 43.35 crore. The total number of PANs is estimated to be over 60 crore.
Rajan said non-linking will invite late fees under Section 234H: Rs 1,000 payable while linking and penalty of Rs 10,000 under Section 272B of the Income-Tax Act “PAN would become inoperative. It shall be deemed that he has not furnished, intimated, or quoted the PAN TDS/ TCS at a higher rate. Transactions in the stock market may not be possible,” he said while listing out other consequences.
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