Penalty on Advance Tax

Others 311 views 2 replies

Tarun Sheth

individual

21 Points Posted on 20 May 2021

Dear Sir

We are 2 partners of a firm who has income of rent from Consulate. For last 2 years the either paid the rent either almost at the end of the year or did not pay the rent.

Since the payments came late the the partnership firm, partners could not count and pay the advance tax from their individual advance tax as the rent in the firms books was not received in the books of partnership firm.

Now we are forced to pay penalty on non payment of advance tax. How can we calculate and pay advance from our individual accounts when the income was not reflected in firms books on the day when we were suppose to pay the advance tax?

Can you help us as we have ended up in paying heavy penalties on non payment of advance tax. Will appreciate your response / guidance on the matter preferably on my email tarunsheth @ yahoo.com.

Regards

Tarun Sheth

Replies (2)

CMA Poornima Madhava

CMA

13117 Points Posted on 20 May 2021

There is no need to wait till receipt. You may estimate the tax liability (based on expected income/receivables during the quarter) and pay advance tax on the basis of estimation to avoid interest liabilities. Tax calculator from IT portal would be a great help: https://www.incometaxindia.gov.in/Pages/tools/tax-calculator.aspx

veerendar singh

tax consultant

3306 Points Posted on 20 May 2021

The income tax act is really insensitive and indiscreet in matters of advance tax.
the act penalises the taxpayers for not remitting adv. tax from own pocket (or even from borrowing) when the receipt of income is deferred, or when one fails to make an approximate estimate of yearly income at the beginning of year.

there is no solution to it.
infact the provision itself is wrong.