I get into a situation where a company is attracted 234C interest for the previous year 2011-12. This company has paid tax based on MAT. It also has capital gains during the year. Now, at the time of calculating 234C interest, whether can I give allowance for the capital gains, thereby reducing the interest burden?
If so, how does the eReturns of ITR support this?
No, Advance tax liability arises even if the total income contains capital gains....so no deduction for the same for computing Interest u/s 234B and 234 C.
Question is posted now clearly...earlier it was not.....
as per first proviso to sub-sec (1) of section 234C, interest will not be applicable, if any shortfall in the payment of tax due is on account of under-estimate or failure to estimate the amount of capital gains..
According to me, profit on sale of asset included in books profits cannot be reduced while calculating Interest under section 234C. This is because the section mentions the word "Capital gains". Profit on sale of asset is covered under the head "Profit on Business/profession". The same is not specifically covered by section 234C.
Naveen Fintech Pvt Ltd
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CA Inter
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Gupta Sachdeva & Co. Chartered Accountants
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CA Final
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