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Interest calculation u/s 234c

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Querist : Anonymous

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Querist : Anonymous (Querist)
11 February 2013 Dear All,

Our client is company. They have paid advance tax 2nd installment on 16th Sep instead of 15th Sep. Now the question is whether the company has to pay interest u/s 234C for one month or 3 months?

Thank you.
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CA PARAS BAFNA

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CA PARAS BAFNA (Expert)
11 February 2013
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Interest has to paid @ 1% per month for three months as per the language of the section.
.
However, if you go by the intention of the law, it is clear that interest has to be paid @ 1% per month for the delay in paying advance tax. Otherwise, 3% could have very well be written in place of 1%.
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Generally, IT softwares are also calculating interest of 3 months in such cases. Yet , in my view, you are required to pay interest only for a month (and not a penalty of 2% extra).
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