234c

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 March 2013 Long Term Capital Gain(other than Securities) of Rs.1000000 arised on 15/07/2012 but the assessee has paid the Capital Gain Tax of Rs. 200000 on 21/03/2013.

Whether the Interest on 234C would be chargeable on Such Capital Gain Tax or not?

In my opinion the interest should not chargeable as per following proviso

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 1[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:]

Please help me.... thanks in advance

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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26 March 2013 The above said provision by you applicable only where the estimation of capital gain is short or no chance to estimate. But in your case you already confirmed your capital gain on 15/7/2012 so there is no short estimation or faiure to estimate.

So for your case Section 234C will be applicable.

For your clarification following example.

According to the section 45 capital gain shall be taxable in the year of transfer u/s 2(47) taken place that means consideration shall be receive after transfer means receipt of consideration is immeterial to arise and paying capita gain and tax.

So at the time of transfer there is no aggrement or proper confirmation or perfect evidence to the receipt of consideration then we shall estimate the consideration receivable in future. In such case the above said provision will apply.

Assume if the asset transfer to the government and government shall pay consideration and we not sure how much consideration will be pay by the government and which format but the assessee has to pay capital gain tax in that case we have to estimate capital gain and tax or shall we wait for confirmation and declaration of consideration then we have to pay total tax liability in one instalment then above said provision applicable.

So in your case you already arrived capital gain amount on 15/7/2012 so above you said provision not applicable and lible for interest u/s 234C.

OM SAI SRI SAI JAI JAI SAI

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