19 February 2008
Dear Arun, 1st you analyse whether the advance tax and tax deducted at source is less than 90% of the total tax due or more.If it is more than 90% then no iterest u/s 234B will be levied or else 1 % per month will be levied on the shortfall amount from the month of April to the month of payment.Example - Total tax inculding Education cess is coming Rs.120000.00, advance paid Rs.80000.00. and self assessment tax paid on 22nd June. Hence Shortfall amount of Rs.40000.00, Iterest to be charged u/s 234B on Rs.40000.00 upto the date of payment from the month of April.Hence interest for four months will be charged (40000X1%X4)
20 February 2008
Thanku. its fine. This is abt 234b. But i want to know 234b in case where SAT is paid twice for the Tax liability. we'll consider ur Eg. Tax payable 120,000 & Adv tax paid 80,000. Short fall is 40,000. Suppose SAT of Rs. 10,000 is paid on June 22nd & the balance Rs.30,000 is still payable. On Dec 15th again balance SAT is paid off.
In this case, how the payment of SAT in part payment(Twice paid,)will affect the calculation of Int u/s 234b?
27 February 2008
dear Arun, first calculate interest at 1% pm on Rs 40000 for 2 months ie April & May and pay interest at 1% on Rs 30000 for 7 months ie from June to Dec - both inclusive. Thia is because part of a month is to be taken as full month. I hope this clear to you now
27 February 2008
dear Mr arun I am making a correction in my answer - first calculate interst on 40000 for 3 months ie April,May & June , then calculate int on 30000 for 6 months ie July to Dec - this is the correct procedure - excuse for confusing u
CAclubindia
