Charging 234B and 234C without Considerinh Relief Under Section 89

Tax queries 1573 views 9 replies

Dhebek

Student CA IPC / IPCC

123 Points Joined December 2012

Respected CCI Members,

Kinldy Clarify My Doubt Regarding 234B and 234C.

My Friend has received arrears of salary and I worked out Relief Under Section 89 and filed 10e along with return.When I consider Relief under section 89, My friend need not to pay any tax since total tax liabilty is offset by relief.But Last week my friend has intimationhttps://www.auditguru.im 143(1). In it, ITD has calculated 234B and 234C without considering relief and demanded that interest amount.
my doubt is as follows.
since no tax liability, why did they calculate 234B and 234C?

They consider relief only after charging 234B and 234C and in net, ITD demanded that interest

Kindly Clarify My Doubt.

Thanks in Advance,

Dhebek.M.N

Replies (9)

Dhebek

Student CA IPC / IPCC

123 Points Joined December 2012

Extremely sorry for inclusion of one website.

CA Veerendra Murashillin,HUBLI

CA PRACTICE

72 Points Joined November 2016

SAME IS ONE CASE OF MINE.REFUND IS RS 3815 BUT INT DEMAND IS 43535/-.WHAT MAY BE THE REASON.

Dhebek

Student CA IPC / IPCC

123 Points Joined December 2012

Sir I have requested department to reprocess the case under section 154.

Ushas

Student

26 Points Joined November 2010

I have experienced the same issue and received notice charging 234B & 234C before relief..Have u resolved the issue..If yes..Tell me how

SHIRISH S S

Proprietor

1080 Points Joined May 2017

Since this is all machine based- such things happen. It is not possible to manually assess each case. Same thing happened to me last year not for sec 89 but for TDS mismatch even though TDS credit was available on 26AS. I also got int u/s 234 and demand. I simply rectified the return u/s 154 and I got refund.

Ushas

Student

26 Points Joined November 2010

Sir, The Return i am talking about is Ay 2018-19. I got notice where Net liabilty is Nil after adjusting Relief 89( even in notice) .but still they charge Section 234B and Section 234C.But when i am trying to file rectification by clicking rectification request ..Ay 2018_19 is not available in drop down list..only AY 17-18 and backward only. So Sir as you say I can revise Return . but whether will it be use becuase if Department or system is intentionally charging interest and if it is not a mistake..so please if anyone has dealt with the specific issue and resolved the issue in any way without paying interest..please guide me

SHIRISH S S

Proprietor

1080 Points Joined May 2017

That means sufficient advance tax was not paid. Tax liablility - TDS is the advance tax component. Which should be paid . See the attach file

Ushas

Student

26 Points Joined November 2010

Thanks for the reply Shirish sir

CA Siddharth Saraf

Practice

23 Points Joined April 2016

I very well know what the problem is although it is a bit late to reply on a year ago query, sorry for that.

Section 234B specifically mentioned what to be deducted from tax payable while calculating interest and in that section only 5 things are mentioned and relief of 89 is not deductible from that assessed tax, let me simplify the calculation.

Interest is payable on "assessed tax" which is calculated on tax payable on total income and the tax on the total income determined by reducing the amount of TDS, relief u/s 90 & 90A, 91 tax credit allowed under section 147 or section 153A.

As section 89 is not specifically mentioned thus can not be deducted from total income for calculating assessed tax thus interest will be payable on that amount.

Extract of the section In this section,"assessed tax" means the tax on the total income determined under sub-section (1) of section 143 and where a regular assessment is made, the tax on the total income determined under such regular assessment as reduced by the amount of,—

(i) any tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income;

(ii) any relief of tax allowed under section 90 on account of tax paid in a country outside India;

(iii) any relief of tax allowed under section 90A on account of tax paid in a specified territory outside India referred to in that section;

(iv) any deduction, from the Indian income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and

(v) any tax credit allowed to be set off in accordance with the provisions of section 115JAA or section 115JD.