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Advance tax query


CA Vinit Malani (.)     20 February 2016

CA Vinit Malani
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Hello everyone!

Will the person be liable for advance tax if TDS on salary & TDS on FD is deducted?

My client as received an Intimation u/s 143 regarding the same. The software has not taken Interest under 234B & 234C, & we have received the intimation stating that he is liable for interest under 234B & 234C & tax demand is raised for the same.

Please solve my query at the earliest.

Shivani Mittal

Shivani Mittal (Practice)     20 February 2016

Shivani Mittal
Practice 
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Liability to pay advance tax will arise if tax liability after adjusting TDS is more that Rs. 10,000/-.

I believe by Sec 143 you mean Sec 143(1). Such demand has to be paid else it will be adjusted by means of Sec 245 in future years.

Regards

CA Shivani Mittal

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CA Vinit Malani

CA Vinit Malani (.)     20 February 2016

CA Vinit Malani
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Thank for your reply Mam.

But the provision also states that 90% should be paid, as our TDS deducted is more than 90%, are we still liable to pay Interest u/s 234B & 234C ?

 

Shivani Mittal

Shivani Mittal (Practice)     20 February 2016

Shivani Mittal
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Clause of 90% payment is for interest u/s 234B which has a prerequisite of libality to pay advance tax. 

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CA Vinit Malani

CA Vinit Malani (.)     20 February 2016

CA Vinit Malani
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Thank You Mam.

It means that we need to pay the demand rasied & we are liable for both 234B & 234C?

Isn't it mam?

Shivani Mittal

Shivani Mittal (Practice)     20 February 2016

Shivani Mittal
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Steps to be considreed :

  1. Check tax payable net of TDS.
  2. If net tax payable as per point 1 exceeds Rs 10,000/-, advance tax liability arises. Hence, interest u/s 234C.
  3. Check if total tax paid is >= 90% of total tax libility.
  4. If yes, interest u/s 234B will be levied
  5. If no, interest u/s 234B cannot be levied.

If it is a case of point 5 and still interest u/s 234B is levied, then raise an objection.

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CA GOKUL RAJ R

CA GOKUL RAJ R (Chartered Accountant)     20 February 2016

CA GOKUL RAJ R
Chartered Accountant 
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Dear Vinit Malani,

If the entire tax liability has been deducted by means of TDS, then no interest shall be levied. 

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CA Vinit Malani

CA Vinit Malani (.)     22 February 2016

CA Vinit Malani
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Respected Shivani Mam,

You mean to say that if TDS deducted is more than 90% of tax liability, then interest U/s 234B is not to be levied right?

In the intimation notice, interest u/s 234B is also levied & wereas the TDS deducted is more than 90% of Tax Liability.

Thus Interest u/s 234B is not to be levied.

CA Vinit Malani

CA Vinit Malani (.)     26 February 2016

CA Vinit Malani
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Respected Mam,

My assessee has filled Return u/s 44AD. Thus both the Interest will be not be liable right?

Shivani Mittal

Shivani Mittal (Practice)     27 February 2016

Shivani Mittal
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  1. Yes
  2. Asseessee opting for Sec 44AD are not liable to pay advance tax. Hence, no interest u/s 234C & 234B.

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