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You need to pay advance tax in four tranches

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I have been working as an assistant professor at a government college for 13 years on a regular basis. Before that, I had worked at the same college as an assistant professor for 13 years on a consolidated (casual) basis without any break. Am I eligible for gratuity during the casual period?

—Name withheld on request

It is assumed that the college is covered under the Payment of Gratuity Act, 1972.

As per the Act, a person who is employed for wages in or in connection with an establishment to which the Act applies and has rendered continuous service for not less than five years shall be eligible to receive gratuity.

During the period of services rendered on a casual basis, it would need to be evaluated whether you qualified as an employee, depending upon the terms of your contract, period of contract, etc.

Only in case you satisfy the above requirements, you may be eligible for gratuity for this period. You may also wish to discuss this further with your employer.

I’m an Indian national and I work for a foreign consulate office in Mumbai. We have contractual jobs here. Our tax is not deducted by the employer. Could you let me know if I have to pay income tax? If yes, which ITR form has to be used?

—Manasi

As you are an Indian citizen, the income received by you from the foreign consulate office shall be taxable in your hands in India. As taxes are not deducted at source on this income, you would need to discharge your taxes by payment of advance tax in four specified instalments (i.e. 15% of total tax by 15 June, 45% of total tax by 15 September, 75% of total tax by 15 December and 100% of total tax by 15 March).

Any delay or deferment in the 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 payments, the balance tax liability would need to be discharged as self-assessment taxes prior to the filing of the tax return along with applicable interest.

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

Please note that the categorization of income may be in the nature of salary income or profits and gains from business or profession (PGBOP), depending upon the facts of your case, nature of work, reporting and contracting arrangements, etc. The tax liability may accordingly be computed after considering the relevant deductions and expenses as may be applicable to salary or PGBOP income.

In case the income is in the nature of salary, for FY21, you would need to file ITR-1 or ITR-2 depending upon the income level and other prescribed factors. In case the income is in the nature of PGBOP, you would need to file ITR-3 or ITR-4 depending upon the facts of your case. Separately, do note that in the case of PGBOP, the requirement of maintenance of books of accounts, tax audit and GST may be verified separately.

Parizad Sirwalla is partner and head, global mobility services, tax, KPMG in India.

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