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234C
Direct Taxation
Suppose... Total tax liab hai = â?¹5,00,000 15th June taak Adv tax bharna hai = â?¹75,000 Bande ne â?¹50,000 advance tax deposit kiya. Then 15th July ko baaki â?¹15,000 bhardiya. To interest banega = â?¹15,000 Ã? 1% Ã? 2 months = â?¹300 right? Or agar due date miss kardiya to 3 months hi lena padega?
Answers (16)
Best Answer
CA Suraj Lakhotia Admin
234C Interest under section 234C is levied for a period of 3 months, in case of short fall in payment of 1st, 2nd and 3rd instalment and for 1 month, in case of short fall in payment of last instalment.
The section is clear on this. I have reproduced the bare act text for your reference. 234C. (1) Where in any financial year,â?? (a) an assessee, other than the assessee referred to in clause (b), who is liable to pay advance tax under section 208 has failed to pay such tax orâ?? (i) the advance tax paid by such assessee on its current income on or before the 15th day of June is less than fifteen per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of September is less than forty-five per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than seventy-five per cent of the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one per cent per month for a period of three months on the amount of the shortfall from fifteen per cent or forty-five per cent or seventy-five per cent, as the case may be, of the tax due on the returned income; (ii) the advance tax paid by the assessee on the current income on or before the 15th day of March is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one per cent on the amount of the shortfall from the tax due on the returned income:
Yeah sure i am asking A guy who has a tax liability= 5,00,000 In first installment i.e.15 june he paid 50,000 but payable amt is 75k On 15 july he paid remaining 15k Then how much interest u/s 234c will be = 15k*1%*3 months Or we will take two months instead of 3 month for calculation ????
Thread Starter
Rick YYeah sure i am asking A guy who has a tax liability= 5,00,000 In first installment i.e.15 june he paid 50,000 but payable amt is 75k On 15 july he paid remaining 15k Then how much interest u/s 234c will be = 15k*1%*3 months Or we will take two months instead of 3 month for calculation ????
Interest u/s 234C for deferment of advance tax up to June 15th is - 75k-50k * 1% * 3 months = 25k*1%*3 months = Rs750
Avasarala Vivek Aditya
Interest u/s 234C for deferment of advance tax up to June 15th is - 75k-50k * 1% * 3 months = 25k*1%*3 months = Rs750
Why we take whole 3 months he paid the remaining amt on 15 july ( from 15 june to 15 july is one month time period) then why he has to pay the interest from 15 july to 15 sept as there was no amt was unpaid .
Thread Starter
Rick YWhy we take whole 3 months he paid the remaining amt on 15 july ( from 15 june to 15 july is one month time period) then why he has to pay the interest from 15 july to 15 sept as there was no amt was unpaid .
This interest pertains to the payment you have not done from 15th March to 15th June. So, you delayed by 3 months, by not paying on or before 15th June.
Avasarala Vivek Aditya
This interest pertains to the payment you have not done from 15th March to 15th June. So, you delayed by 3 months, by not paying on or before 15th June.
15 march is related to last . No relation with the current py. My due date is 15 june and after that if i fail to pay them interest will be levied on the shortfall... And that 3 months calculation is done because govt assume that the shortfall will be paid by assess on next installment due date ( after 15 july next date is 15 sept) In last we take only 1 month because 15 march to 31 march ( part of month will be round off to month) after 31st new AY start (
Thread Starter
Rick YIf i pay the shortfall before the due date i.e.15 july me then interest will be levied on 15,000 as 1 month??? I want only confirmation am i right or not?? Why we take full 3 month as he already paid the shortfall on 15 july
It's not right because - The advance tax liability for the Quarter 1 (April to June) is Rs 75,000. But you have only paid Rs 50,000 as on 15th June. So for the difference of Rs 25,000 you should pay 1% interest for the 3 months (in the first quarter).
Thread Starter
Rick YIf i pay the shortfall before the due date i.e.15 july me then interest will be levied on 15,000 as 1 month??? I want only confirmation am i right or not?? Why we take full 3 month as he already paid the shortfall on 15 july
Because this shortfall is for the preceding months of June 15th (i.e April,May,June - 3 months) Even if you pay on June 16th, you have to pay the interest for 3 months. This is my contention. I hope it's correct. Let's wait for any faculty to confirm.
Avasarala Vivek Aditya
Because this shortfall is for the preceding months of June 15th (i.e April,May,June - 3 months) Even if you pay on June 16th, you have to pay the interest for 3 months. This is my contention. I hope it's correct. Let's wait for any faculty to confirm.
234C Interest under section 234C is levied for a period of 3 months, in case of short fall in payment of 1st, 2nd and 3rd instalment and for 1 month, in case of short fall in payment of last instalment.
CA Suraj Lakhotia Admin
The section is clear on this. I have reproduced the bare act text for your reference. 234C. (1) Where in any financial year,â?? (a) an assessee, other than the assessee referred to in clause (b), who is liable to pay advance tax under section 208 has failed to pay such tax orâ?? (i) the advance tax paid by such assessee on its current income on or before the 15th day of June is less than fifteen per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of September is less than forty-five per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than seventy-five per cent of the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one per cent per month for a period of three months on the amount of the shortfall from fifteen per cent or forty-five per cent or seventy-five per cent, as the case may be, of the tax due on the returned income; (ii) the advance tax paid by the assessee on the current income on or before the 15th day of March is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one per cent on the amount of the shortfall from the tax due on the returned income:
This is very clear given ______at the rate of one per cent per month for a period of three months on the amount of the shortfall_______ The question raised by Manav is valid as this sound illogical. The government does this so that they can manage their finances better.
CA Suraj Lakhotia Admin
This is very clear given ______at the rate of one per cent per month for a period of three months on the amount of the shortfall_______ The question raised by Manav is valid as this sound illogical. The government does this so that they can manage their finances better.
Thank you for your detailed clarification Sir
CA Suraj Lakhotia Admin
This is very clear given ______at the rate of one per cent per month for a period of three months on the amount of the shortfall_______ The question raised by Manav is valid as this sound illogical. The government does this so that they can manage their finances better.
Thank you sir... For this explanation
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