Outstanding tax demand

The Income Tax Act provides for charging of interest for non- payment/short payment/deferment in payment of advance tax which is calculated as below:

(i) INTEREST U/S 234A: For late or non furnishing of return, simple interest @ 1% for every month or part thereof from the due date of filing of return to the date of furnishing of return, on the tax as determined u/s 143(1) or on regular assessment as reduced by TDS/advance tax paid or tax reliefs, if any, under Double Tax Avoidance Agreements with foreign countries.

(ii) INTEREST U/S 234B: For short fall in payment of advance tax by more than 10%, simple interest @ 1% per month or part thereof is chargeable from 1st April of the assessment year to the date of processing u/s 143(1) or to the date of completion of regular assessment, on the tax as determined u/s 143(1) or on regular assessment less advance tax paid/ TDS or tax reliefs, if any, under Double Tax Avoidance Agreements with foreign countries.

(iii) INTEREST U/S 234C: For deferment of advance tax. If advance tax paid by 15th September is less than 30% of advance tax payable, simple interest @ 1% is payable for three months on tax determined on returned income as reduced by TDS/TCS/Amount of advance tax already paid or tax relief, if any, under Double Tax Avoidance Agreement with forgiving contribution. Similarly, if amount of tax paid on or before 15th December is less than 60% of tax due on returned income, interest @ 1% per month is to be charged for 3 months on the amount stated as above. Again, if the advance tax paid by 15th March is less than tax due on returned income, interest @ 1% per month on the shortfall is to be charged for one month.

Since Advance tax payment not apply to your case so no need to pay interest....

so log into your account and pay it through online....by selecting challan  280 and check income tax other than companies, give your address.  pay under code 400 tax on regular assessment...

Thanks Satish for the detailed reply.

A few more questions from me:

1. While paying the tax in NSDL site, it is asking for Assessment year. In the income tax site, it is just mentioned as AY 2007. So can I enter AY 2007-2008 in NSDL site.

2. After paying the tax online, do I need to do anything else to get the outstanding tax demand cleared.

Thanks,

Sid

HI Experts,

Is the process same for a salaried person. I got a additional demad for the year 2009-2010.

The amount is 690 rupees.

og into your account and pay it through online....by selecting challan  280 and check income tax other than companies, give your address.  pay under code 400 tax on regular assessment...  

 

If you are staisfied with the demand, you can pay outstanding tax amount appearing in the e-filing portal. However you should be careful in selecting Type of Payment code 400 (Tax on regular assessment as well as correct assessessmnt year.

More information visit article How to respond to income tax demand outstanding