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Any delay or deferment in payment of advance tax will have interest implications
Any delay or deferment in payment of advance tax will have interest implications

You will be charged penal interest for not paying timely advance tax instalments

For FY21, an individual is required to pay advance tax in four specified instalments

I am a 30 years old salaried person. I want to buy a home in my mother’s name. I am depositing an amount (on which I have already paid tax) in my mother’s account because only the property owner can issue the cheque in the name of the builder. What will be the taxability of this amount in my mother’s or my hands?

—Hital Negi

The amount deposited by you in your mother’s account would be considered as a gift. As your mother shall receive the gift, from a specified relative (her son in this case), the transaction of gift itself will not trigger any income tax implications for yourself or your mother.

We have presumed that the transfer of money to your mother is a gift, which is an unconditional and irrevocable transfer.

Also read: Why your health plan premium is suddenly spiking

I have started working as a consultant at two places. Both the places will cut 10% tax deducted at source (TDS). I am not sure if the companies will give me a Form 16 for FY21. However, if I add both the incomes, I will fall in the 20% slab. How do I pay the extra tax that I will be liable to? Should I pay it at the time of filing my income tax return (ITR)?

—Jay Bajaj

If your total tax liability (net of TDS on the estimated income, is likely to be 10,000 or more during the relevant financial year (FY), you are required to pay such tax by way of prescribed advance tax instalments during the FY itself.

For FY21, an individual is required to pay advance tax in four specified instalments (15% of the total tax by 15 June 2020, 45% by 15 September 2020, 75% by 15 December 2020 and 100% by 15 March 2021).

However, please note that if you are declaring your income in accordance with the presumptive taxation scheme under Section 44AD or 44ADA of the Income-tax Act, 1961, you are only required to pay 100% of the total tax by 15 March 2021.

Any delay or deferment in payment of advance tax will have interest implications as prescribed. In case the taxes are not paid as advance tax or there is a shortfall in the advance tax payment, the balance tax liability would need to be discharged as self-assessment taxes, prior to filing of the ITR along with applicable interest.

Accordingly, you may pay the entire taxes in advance as per the prescribed instalments applicable to you, so as to avoid interest implications on delay or deferment in payment of taxes.

Parizad Sirwalla is partner and head, global mobility services, tax, KPMG in India. You can send in your queries and views at mintmoney@livemint.com

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