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Interest U/s.234C (Income Tax)

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This query is : Resolved



( Author )
22 March 2010

If Assessee is not liable to pay advancetax ,wil section 234C attracts? if not, den under which provision?


CA. RAJESH Kr. MAURYA

( Expert )
22 March 2010

The Section 234C relates to interest for deferment in instalments of advance tax. But as you said in your case there is no advance tax, hence the question of deferment does not arise and nor does the question of section 234C.


sandeep

( Author )
22 March 2010

but if suppose the assessee has filed return before the duedate & assumed tax on income is 6250/- and TDS is deducted 3250/- & if the A.O. has sent an intimation stating payment of Interest U/s.234C of Rs.1000/- is it correct??
explain with provision


CA. RAJESH Kr. MAURYA

( Expert )
22 March 2010

Dear Sandeep, as you said you paid tax of Rs 6250 (considering that it is extra tax excluding TDS), then as per provisions advance tax was to be paid as it exceeded Rs.5000 (taking into account provisions upto Finance Act,2008). Inspite of requirement you didn't pay advance tax, hence liable for interest u/s 234C.

And judge accuracy of Rs.1000/- exact details of payment and filing of return are needed.


sandeep

( Author )
22 March 2010

no..tax payable on total income was 6250/- and tax deducted was 3250/- so bal was paid by assessee as S.A.Tax and as per sec234C advance tax is payable after considering TDS and on net tax payable interest is levied..den since the next tax payment is less den 5000/- sec 208 doesnt apply to assessee...hence if sec 208 is not applicable...toh the A.O.is wrong in dis case...is it right or wrong??


CA. RAJESH Kr. MAURYA

( Expert )
22 March 2010

If total tax is 6250 and after TDS, it remains Rs.3000, then as it is less than 5000, no need of advance tax. Yes from the situation it seems that the AO has sent invalid demand notice to you. So you can fight on these basis.


sandeep

( Author )
22 March 2010

thnx sir...


CA Ashok Kumar Sahu

( Expert )
22 March 2010

agreed


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