Hello,
When will sec 234b come into effect? Had to pay advance tax of RS.16000/- (less than 10% of the total tax liability). Paid self assessment tax in July of that year and filed return before due date . Did not pay interest u/s 234B or 234C since amount was less than 10% of the total tax liability. Now there is a demand from ITO for payment of interest u/s 234B and 234C. Was my assumption wrong?
Thanks in advance.
What ever you considered is right, why AO issued notice i don't know, but may be it is wrong notice, have to go for argument with all supporting documents i.e., ITR Filed Copy, Advance Tax Payment Challans, Computaion Copy etc.,
234B gets attracted when someone does not pay the advance tax. Here tax amount if it exceeds 10000 then one has to pay regular advance tax.
Exception: if assessee pays 90% of the total tax as advance tax then 234B does not get attracted.
Interest u/s 234B is not leviable if Total tax paid (Advance Tax + TDS) is not less than 90% of Tax assessed.
it means if advance tax + TDS is less than 90% of tax assessed then intt. u/s 234B is leviable
in yours case tax paid is not even 10%
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