What is Penalty for non-payment of Advance Tax?
Nexa Consultancy | Startup & Finance Glossary
Failure to pay advance tax or paying less than the required amount by the due dates attracts penal interest under sections 234B and 234C of the Income Tax Act. Interest is levied at 1% per month on the shortfall.
Startup Example: A startup fails to pay its advance tax installments correctly. At the end of the year, the tax department calculates the shortfall for each quarter and applies interest, leading to a significantly higher total tax outgo.
Our guides emphasize the importance of early tax planning.