Interest u/s 234a, 234b

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Hello Friends .....

if an assessee who filled his beleted return but he deposit the tax liablity in deffered manner like --

total tax liablity Rs. 10 lakh,

Advance tax - Rs. 5 lakh (up to 31st march of relevent previous year)

Self Asseessment Tax - Rs 4 lakh (after due date, say 30 october )

Self Assessment Tax - Rs 1 lakh ( at the time of return filling, say 31 march )

 

My question is weather the interest is chargble on full amount  i,e 10 lakh - 5 lakh advance tax only, or it will be calculeted after the deduction of Rs. 4 lakh.

because at the time of Return Procaessing by CPC, charged interest on full amount  ( i,e 10 lakh - 5 lakh only ) for total perieod but many tax base software given the credit of self assessment tax also and interest charged on balance amount.

i think they take the advantage of Pranoy roy case, weather the said case law will apply  in my case.

thanks in advance....

 

 

Replies (3)

As per law, interest needs to calculated on the assessed tax whihc is total tax liability minus TDS if any.  so in your case interest will be calculated on Rs 10lacs.  Self asst is not considered because the section talks about pymt of advance tax wihch shud be more than 90% of the assessed tax.  you are paying self-asst tax becasue the advance tax paid by you might be less than90% of the assessed tax.

Advance tax shud not be deducted from assessed tax.

Interest will be charged as under -

Since 5.00 lakh has been paid as advance tax  after 1.4.20xx no interest is leviable on this amount. 

.

For the Balance 5.00 lac, which remained unpaid till  31.3.20xxx , interest will be charged U/s  234-A, 234-B and 234-C respectively.  

.

However you may get respective credit of the installments paid for advance tax of Rs 5.00 lac while calculating interest U/s 234-C (till 31.3.20xx)

.

Further , interest U/s 234A and 234 B will be reduced after SAT 4.00 lac has been paid. 

.

 

thank you so much for your valuable suggestion .but i want to know after payment of Self Asseesment Tax the interest is calculated on balance amount [ after deduction of SAT ] where the same law is written ? is it act priscribed any metheod of calculation or any rule made there under .

Because the most of the publication on IT. does not allow to deduct 140A TAX while calculating interest for 234 A & 234 B 

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