As per Section 207,
every person should pay Income Tax in advance but as per Section
208, advance tax is exempt if tax payment during a
particular year is less Rs10000 .
As per Section 211,
advance tax is to be paid in the manner given below :
a)
When assesseee is Company .
Upto 15th
June of Previous Year
|
15% of tax payable
|
Upto 15th
September of Previous Year
|
45% of tax payable
|
Upto 15th
December of Previous Year
|
75% of tax payable
|
Upto 15th
March of Previous Year
|
100% of tax payable
|
b)
When assesseee is person other than a Company .
Upto 15th
September of Previous Year
|
30% of tax payable
|
Upto 15th
December of Previous Year
|
60% of tax payable
|
Upto 15th
March of Previous Year
|
100% of tax payable
|
If any assesseee has defaulted in payment of advance tax then
Interest shall be charged u/s 234C @ 1% per month for a period of 3 months on the
amount of default in each installment but in the last installment Interest
shall be charged for one month only.
Any amount of Income tax paid upto 31st March of previous year is called Advance tax and any tax paid after 31st March is called Self-assessment
tax .
If advance tax paid is less than 90% of tax payable then assessee
shall be required to pay Interest u/s 234B also
@1% per month or part of a month for the period starting from 1st
April of Assessment Year upto the date of payment .
If any assessee has paid Income tax after the last date of
filing of Return of Income in that case,
Interest shall be charged u/s 234A also @1% per
month or part of a month for the period beyond the last date of filing of
return of Income.
If any assessee has paid Income tax in excess it will be refunded with interest @0.5% or part of a month for
the period starting from 1st day of AY upto the date of granting
refund but if refund is less than 10% of tax liability, no Interest is payable
.
Q1.
ABC Ltd. Has estimated its tax payable to be Rs 12,00,000 for PY 2012-13 and
paid advance tax accordingly but actual tax liability was found to be Rs
20,00,000 and the Company the balance amount on 10/12/2013.
Compute Interest
payable u/s 234A/234B/234C ?
Solution: PY 2012-13, AY
2013-14
Due Date
|
Tax on Estimated
Liab.
|
Tax on
Actual Liab.
|
Deficiency
|
Interest u/s 234C
|
15th
of June
|
180000
|
300000
|
120000
|
120000*1%*3=3600
|
15th
of September
|
540000
|
900000
|
360000
|
360000*1%*3=10800
|
15th
of December
|
900000
|
1500000
|
600000
|
600000*1%*3=18000
|
15th
of March
|
1200000
|
2000000
|
800000
|
800000*1%*1=8000
|
Total
|
Rs40,400
|
Interest u/s
234B ( from 1st April of AY upto DOP)
= 8,00,000*1%*9 months = Rs 72,000
Interest u/s
234A (from due date of return upto DOP)
= 8,00,000*1%*3 months = Rs 24,000
As per Section 234C, if any Company has
paid advance tax atleast 12% of actual tax liability upto 15th June
of PY then no
Interest shall be charged u/s 234C for such
installment .
Similarly if the company has paid advance tax at least 36% of actual tax
liability upto 15th September of PY then no Interest shall be charged u/s 234C for such installment .
Q2. ABC Ltd. Has estimated its tax
payable to be Rs 9,00,000 and paid advance tax accordingly but actual tax
liability was found to be Rs 9,50,000 and balance amount was paid by the
Company on 10/12/2013.
Compute Interest
payable u/s 234A/234B/234C ?
Solution: FY
2012-13, AY 2013-14
Due Date
|
Tax on Estimated Liab.
|
Tax on Actual Liab.
|
Deficiency
|
Rate of
Tax on Actual Liab.
|
Interest u/s 234C
|
15th
of June
|
135000
|
142500
|
7500
|
135000/950000*100=14.2%
|
0
|
15th
of September
|
405000
|
427500
|
22500
|
405000/950000*100=42.6%
|
0
|
15th
of December
|
675000
|
712500
|
37500
|
-
|
37500*1%*3=1125
|
15th
of March
|
900000
|
950000
|
50000
|
-
|
50000*1%*1=500
|
Total
|
=Rs
1,625
|
Interest u/s
234B = 0 because Company has paid advance tax more than 90% of
tax payable i.e., 900000/950000*100= 94.7%
By:-
Udit Rana
udit.rana16121994@gmail.com
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