how int u/s 234c is calculated when there is both income taxable at normal rate & income taxable at spl rate exist.
Calculate int on following assumption - If income taxable at normal rate alone is considered it is less than basic exemption limit. While added it with cap gains such total income is taxable.
(1) Where in any financial year, - (a) The company which is liable to pay advance tax under section 208 has failed to pay such tax or -
(i) The advance tax paid by the company on its current income on or before the 15th day of June is less than fifteen per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of September is less than forty-five per cent. of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than seventy-five per cent of the tax due on the returned income, then, the company shall be liable to pay simple interest at the rate of one and one-half per cent per month for a period of three months on the amount of the shortfall from fifteen per cent or forty-five per cent. or seventy-five per cent, as the case may be, of the tax due on the returned income;
(ii) The advance tax paid by the company on its current income on or before the 15th day of March is less than the tax due on the returned income, then, the company shall be liable to pay simple interest at the rate of one and one-half per cent on the amount of the shortfall from the tax due on the returned income :
Provided that if the advance tax paid by the company on its current income on or before the 15th day of June or the 15th day of September, is not less than twelve per cent or, as the case may be, thirty-six per cent of the tax due on the returned income, then, it shall not be liable to pay any interest on the amount of the shortfall on those dates;
(b) The assessee, other than a company, who is liable to pay advance tax under section 208 has failed to pay such tax or, - (i) The advance tax paid by the assessee on his current income on or before the 15th day of September is less than thirty per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than sixty per cent. of the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one and one-half per cent. per month for a period of three months on the amount of the shortfall from thirty per cent or, as the case may be, sixty per cent. of the tax due on the returned income;
(ii) The advance tax paid by the assessee on his current income on or before the 15th day of March is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one and one-half per cent on the amount of the shortfall from the tax due on the returned income :
Provided that nothing contained in this sub-section shall apply to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of under-estimate or failure to estimate - (a) The amount of capital gains; or
(b) Income of the nature referred to in sub-clause (ix) of clause (24) of section 2, and the assessee has paid the whole of the amount of tax payable in respect of income referred to in clause (a) or clause (b), as the case may be, had such income been a part of the total income, as part of the remaining instalments of advance tax which are due or where no such instalments are due, by the 31st day of March of the financial year 1933.
Explanation : In this section, "tax due on the returned income" means the tax chargeable on the total income declared in the return of income furnished by the assessee for the assessment year commencing on the 1st day of April immediately following the financial year in which the advance tax is paid or payable, as reduced by the amount of tax deductible or collectible at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income.
(2) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.
15 October 2007
Hi Arun, This is the brief on INTEREST U/s. 234-C FOR DEFERMENT OF ADVANCE TAX 1. If no advance tax is paid or the advance tax paid in 1 st instalment on or before 15 th September is less than 30% of the tax payable on threturned income as reduced by taxes deducted at source Simple interest @ 1.25%p,m. is chargeable on the amount of shortfall for a period of 3 months 2. If no advance tax is paid or if the advance tax paid in 2nd instalment on or before 15th December is less than 60% inclusive of 1 st instalment of the tax payable on the returned income as reduced by taxes deduced at source Simple interest @1.25% p.m. is chargeable on The amount of shortfall For a period of 3 months 3. If the advance tax paid on the current income on or before the 15 th day of March is less than the tax due on the returned income Simple interest @ 1.25% on the amount of the short fall from The tax due on the returned income.
However, no interest is leviable if the short-fall in payment of advance-tax is on account of under estimation of the amount of capital gains or any income from winnings from lotteries, crossword puzzles, races, and other games including an entertainment program on television or electronic mode, in which peole compete to win prizes etc., and the assesses has paid the tax on such income as part of the remaining instalment of advance tax which are due or if no instalment is due, by 31st March, of the Financial Year.
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