Provided that if the advance tax paid by the assessee on the current income, on or before the 15th day of June or the 15th day of September, is not less than twelve per cent or, as the case may be, thirty-six per cent of the tax due on the returned income, then, the assessee shall not be liable to pay any interest on the amount of the shortfall on those dates.
What is the meaning of these wordings in section 234C?
As per section 234-C, No interest is payable if advance tax paid on or before 15th June and 15th September is atleast 12% or 36% respectively. However, the Adv.Tax paid falls short of the above %, then Interest u/s 234-C shall be computed by taking the liability as 15% or 45% of Total tax payable, as the case maybe. Hence the rates of 12% or 36% are only criterias to determine whether interest is payable or not.
For instance, if Total Net Tax liability is Rs.100. The assessee is supposed to pay atleast Rs.15 before 15th June.
Case #1: If he fails to pay the above amount but has paid atleast Rs.12 (12% of Rs.100), then interest liability u/s 234-C shall not arise.
Case #2: If he has paid only Rs.10 (which is only 10% of Rs.100), then he shall be liable to pay interest u/s 234-C on (Rs.15 [not Rs.12]- Rs.10) x 1% x 3months = Rs 0.15.
The rate of 36% is also to be similiarly interpreted.
Note: From AY 2017-18 onwards, the above benefit is available to all assessees other than those opting for 44AD taxation. (earlier it was available only to Corporate assessees).
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