parvesh garg (Student CA / Articleship) (100 Points)
23 January 2017Hey,
If some one paid Rs. 1,00,000 as advance tax on 31-03-2016. and his tax liability for that year (FY: 2015-16) was 1,50,000.
So my question is
what is the amount on which interest u/s 234C is to be calculated. 1,50,000 or 50,000
Please provide the answer with solution..............
Saikrishnan S
(Chartered accountant - Plintron)
(186 Points)
Replied 25 January 2017
As per section 234C, the following is the interest computation :
| Situation | Shortfall amount | Interest rate |
| 1st Quarter | 15% of assessed income - Cum. Advance tax | 1% per month for 3months |
| 2nd Quarter | 45% of assessed income - Cum. Advance tax | 1% per month for 3months |
| 3rd Quarter | 75% of assessed income - Cum. Advance tax | 1% per month for 3months |
| 4th Quarter | Total assessed incoe - Cum. Advance tax | 1% per month for 1 month |
Hence, you need to compute interest only on the shortfall amount.
Also note that in case of 12%, 36% advance tax is paid respectively for Quarter 1 & Quarter 2, no 234C interest is applicable.
The above provision relates to company, and in case "for other than company" the provisions are different.
To conclude with, in order to compute tax under section 234C, you will need the following details :
1) Total Assessed Income
2) Advance tax payment amounts along with date of payments
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