Sec 234b

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arpit (Querist)

01 February 2013 i have one query. please help me to sort out.

As per section 209 of income tax act, if the advance tax deposited by assessee is less than 90 % of tax assessed, then assessee is liable for interest u/s 234B.
but my question is-
(i) what if the entire income of the assessee is subjected to tds?
for ex: total tax liability is Rs.2 lac and tax deducted is 1.92 lac. Now whether assessee is liable for interest u/s 234B.

i know that as per income tax for calculating liability for interest u/s 234B , limit of 90% is chacked on assessed tax (tax liability-TDS) and in this case, assessed tax is Rs.8000 and since assessee has not deposited advance tax of Rs.7200 (90% of 8000), he is liable for interest u/s 234B.

but since the out of the total tax 96% is deducted as tds. so i think interest should not be charged u/s 234B.

what is your view?
please let me know in detail.
thanx

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

02 February 2013 10% of Assessed Tax = 20000/-
.
So, Interest U/s 234-B is not chargeable.
.
One more point to be kept in mind-
Here the Tax Liability is treated as below 10000/- , so 234-B, at all is not applicable.
.

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