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Advance tax loophole

13 December 2013

Hi, Want to know how interest on advance tax is calculated for Pvt ltd company. Suppose I do not pay any advance tax till 15 december And on 15th march I pay 100% of applicable tax. In such case will I be liable to pay interest penalty ?

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11 Replies

Arvind Sharma (ACA) (1432 Points)
Replied 13 December 2013

Yes, interst will be charged u/s 234B.

CA Ruben Balooni (Professionalism ™) (1324 Points)
Replied 13 December 2013

Originally posted by : Arvind Sharma
	Yes, interst will be charged u/s 234B.

I beg to differ.

Interest u/s 234B will be charged only in case where total advance tax paid during the previous (financial) year is less than the 90% of the tax liability. Since in your case you've already paid 100% of advance tax by 15th March you'll not be required to pay interest u/s 234B. However, you'll be required to pay interest u/s 234C for deferment in payment of advance tax.

Regards,

Ruben Balooni

Chartered Accountant

3 Like

Arvind Sharma (ACA) (1432 Points)
Replied 13 December 2013

Ops, ya it is 234C

1 Like

Abhilash (Chartered Accountant) (25 Points)
Replied 13 December 2013

interest not charged us 234b, interest is charged us 234c

Mayank Ahuja ("Learner") (586 Points)
Replied 13 December 2013

Agree with Ruben....

Laxmikant Malpure (accounts manager) (26 Points)
Replied 13 December 2013

We pay some amount of tax for pvt Ltd Co upto 15 September & remains up to 90% we will pay on 15th March so interest will be charged us ?

Amit Jain (Sr. Accounts Officer) (96 Points)
Replied 14 December 2013

Is there any limit of income for advance tax become mandatory?

Arvind Sharma (ACA) (1432 Points)
Replied 14 December 2013

ya, it is Rs. 10000. If estimated tax liability for whole year comes to below Rs. 10000, there is no need to pay AT then.

chandan kumar gupta (article) (22 Points)
Replied 14 December 2013

yes agree with ruban

chandan kumar gupta (article) (22 Points)
Replied 14 December 2013

installment should be 15% = till 15th June 45% = till 15th September 75% = till 15 th December and 90% = till 15th March then there will not interact 234C