Interest u/s 220
This query is : Resolved
16 December 2014
As per income tax database one of my client has outstanding demand of Rs 6030 for AY 2005-06.after paying the same now department raised further demand of Rs 3036 as interest payable u/s 220. Should I pay? And if yes in challan 280 where to mention this figure. In Income Tax box or in Interest Box???
16 December 2014
you file a rectification request once u have already paid then y second time?
17 December 2014
Sir first time I paid tax. But since it was paid much later than demand raised under section 156 hence department charged with interest u/s 220.
01 August 2024
If the department has raised an additional demand of ₹3,036 as interest under Section 220 after you have paid the initial outstanding demand of ₹6,030, here’s how you should handle it:
### **1. Payment of Additional Demand:**
- **Interest Under Section 220:** This interest is levied for the period of delay in payment of the tax demand. It is calculated on the outstanding demand that was not paid by the due date.
- **Payment Obligation:** Yes, you should pay this additional demand as it represents the interest charged by the department for the delayed payment of the original demand.
### **2. How to Make the Payment:**
To make the payment, you need to use Challan 280. Here’s how to fill out Challan 280 for this payment:
1. **Select the Tax Applicable:**
- **Type of Payment:** Choose "Self Assessment Tax" or "Advance Tax" from the dropdown, as interest under Section 220 is usually categorized under self-assessment tax.
2. **Fill in the Challan Details:**
- **Assessment Year:** Mention the relevant assessment year for which the interest is being paid, in this case, AY 2005-06.
- **PAN:** Enter the PAN of the taxpayer.
3. **Breakdown of Payment Amount:**
- **Income Tax:** Enter the amount of interest under Section 220 in the "Income Tax" box.
- **Interest:** You should enter ₹3,036 in the "Interest" box to reflect the payment of interest charged under Section 220.
4. **Payment Mode:** You can pay the amount online or through a bank branch.
### **Summary:**
- **Pay the Additional Amount:** The ₹3,036 should be paid as it represents the interest on delayed payment.
- **Challan 280:**
- **Income Tax Box:** Enter the ₹3,036 in this box if you have no other income tax liabilities.
- **Interest Box:** You can also specify the purpose of this payment, mentioning it as interest under Section 220.
### **Additional Steps:**
- **Keep Proof of Payment:** Ensure you keep the receipt of the payment and any communication from the tax department for your records.
- **Check Status:** After making the payment, check the status of the demand to confirm that it has been updated in the income tax database.
If you’re unsure about any details or the correct categorization, consulting a tax professional can provide further clarity and ensure that the payment is correctly processed.
### **1. Payment of Additional Demand:**
- **Interest Under Section 220:** This interest is levied for the period of delay in payment of the tax demand. It is calculated on the outstanding demand that was not paid by the due date.
- **Payment Obligation:** Yes, you should pay this additional demand as it represents the interest charged by the department for the delayed payment of the original demand.
### **2. How to Make the Payment:**
To make the payment, you need to use Challan 280. Here’s how to fill out Challan 280 for this payment:
1. **Select the Tax Applicable:**
- **Type of Payment:** Choose "Self Assessment Tax" or "Advance Tax" from the dropdown, as interest under Section 220 is usually categorized under self-assessment tax.
2. **Fill in the Challan Details:**
- **Assessment Year:** Mention the relevant assessment year for which the interest is being paid, in this case, AY 2005-06.
- **PAN:** Enter the PAN of the taxpayer.
3. **Breakdown of Payment Amount:**
- **Income Tax:** Enter the amount of interest under Section 220 in the "Income Tax" box.
- **Interest:** You should enter ₹3,036 in the "Interest" box to reflect the payment of interest charged under Section 220.
4. **Payment Mode:** You can pay the amount online or through a bank branch.
### **Summary:**
- **Pay the Additional Amount:** The ₹3,036 should be paid as it represents the interest on delayed payment.
- **Challan 280:**
- **Income Tax Box:** Enter the ₹3,036 in this box if you have no other income tax liabilities.
- **Interest Box:** You can also specify the purpose of this payment, mentioning it as interest under Section 220.
### **Additional Steps:**
- **Keep Proof of Payment:** Ensure you keep the receipt of the payment and any communication from the tax department for your records.
- **Check Status:** After making the payment, check the status of the demand to confirm that it has been updated in the income tax database.
If you’re unsure about any details or the correct categorization, consulting a tax professional can provide further clarity and ensure that the payment is correctly processed.
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