Sowmya.S.Balan (Paid Assistant) (749 Points)
22 February 2012Dears,
In our case we are calculating tax under sec 44AD as special business and tax comes to 30000/-. In our Tax calculation software interest under sec 234 B & C are not calculated why? in our software interest under sec 234B & C are calculated only when the income is taxable at normal rates. Is it correct or not? please quote the relevant section also?
CA Vanamala Phani Kumar
(Proprietor of M/s Vanamala and Co)
(972 Points)
Replied 22 February 2012
Assessee covered under Sec44AD is not liable to pay Advance Tax .............!!!!!!!!!!!
I clearly explained later with relevent Sections
Tehsinkhan Pathan
(CA CMA DISA(ICAI) B.COM)
(3956 Points)
Replied 22 February 2012
find following extract :-
"SECTION - 44AD ,SUBSECTION (4)
The provisions of Chapter XVII-C shall not apply to an eligible assessee in so far as they relate to the eligible business."
EXPLANATION OF THIS SECTION :-
• Chapter XVII-C deals with provisions relating to Advance Payment of Tax.
On plain reading of this subsection, we conclude that eligible assessees are exempt from payment of Advance Tax. But the second part of Provision creates a blunder so far it relates to eligible business, which creates lot of doubt.
The following example will better clear your understanding :
Profit under section 44AD Rs. 4.00 lac
(Say Turnover is Rs. 50 lakhs)
Interest Income Rs.5.00 Lac
Total Income Rs.9.00 lac
In this situation, whether the assessee is exempted from provisions of advance tax in all or whether the assessee is liable to Pay advance Tax on interest income of Rs.5.00 lac.
From the understanding of Law, it is clear that the assessee have to pay advance tax on interest income of Rs.5.00 lac.
Certification Course on GSTR-3B Reconciliation with GSTR-2B through AI Tools
CAclubindia
