calculation Interest u/s 234c
This query is : Resolved
21 March 2011
Dear Sir,
I have the following query regarding sec.234C, please suggest me weather interest u/ 234c is leiavable for one month or whole year.
A/y:2011-12
P/y:2010-11
Status:Ltd company
Nature of Bussiness:Investment in shares,Rental Income,Dealing in land
My question is that on 14.03.2011, the said co. sold its land, which is shown by them as SIT.
Q1) weather advance tax should be paid before 15.03.2011.if not than weather it will attract interest u/s.234c(it may be noted that before this sale company has repoted loss till 3rd qtr.)
Q2)As per co. view that the said income can't be predicted(as they were not regularly sold land inspite of showing them as SIT) so interest u/s.234c will be leaivable for month i.e. for march month as they paid full tax on 17.03.2011.
Plz. suggest me
with regards
sumit
I have the following query regarding sec.234C, please suggest me weather interest u/ 234c is leiavable for one month or whole year.
A/y:2011-12
P/y:2010-11
Status:Ltd company
Nature of Bussiness:Investment in shares,Rental Income,Dealing in land
My question is that on 14.03.2011, the said co. sold its land, which is shown by them as SIT.
Q1) weather advance tax should be paid before 15.03.2011.if not than weather it will attract interest u/s.234c(it may be noted that before this sale company has repoted loss till 3rd qtr.)
Q2)As per co. view that the said income can't be predicted(as they were not regularly sold land inspite of showing them as SIT) so interest u/s.234c will be leaivable for month i.e. for march month as they paid full tax on 17.03.2011.
Plz. suggest me
with regards
sumit
22 March 2011
Dear Sumit,
What do you mean by SIT?
If the company is in the business of dealing in land, the income from sale of land on 14/03 will have to be treated as business income, unless the land sold was one of the fixed assets of the company.
If the income is treated as business income, advance tax is payable on it as per all 4 installments irrespective of the fact that loss was reported till 3rd qtr. The argument of income cannot be predicted is not useful in case of business income.
But if the income is Cap Gains, then advance tax has to be paid in the remaining installments after the transactions, which is 15/03 in your case. If tax is not paid by 15/03 interest will apply /s. 234C for 1 month only.
Hope I have solved your query.
What do you mean by SIT?
If the company is in the business of dealing in land, the income from sale of land on 14/03 will have to be treated as business income, unless the land sold was one of the fixed assets of the company.
If the income is treated as business income, advance tax is payable on it as per all 4 installments irrespective of the fact that loss was reported till 3rd qtr. The argument of income cannot be predicted is not useful in case of business income.
But if the income is Cap Gains, then advance tax has to be paid in the remaining installments after the transactions, which is 15/03 in your case. If tax is not paid by 15/03 interest will apply /s. 234C for 1 month only.
Hope I have solved your query.
22 March 2011
Dear Sumit,
As i understand the pvt ltd company is into the business of Investment in shares,Rental Income,Dealing in land and SIT means stock in trade, answer to your queries are as follows:
1)Yes, advance tax is required to be paid by 15th March as any profit from sale of the land will form part of normal business income of the pvt ltd co. and since the tax was paid on 17/03/11, in this case,the company is required to pay interest U/s 234C.
2) Income from sale of land which is part of stock in trade of the company is business income and the argument given by you can not be considered. the company needs to pay all the installment of advance tax. Accordingly, interest will be charged on all the installments of advance tax.
If the land would have been treated as fixed asset of the company, interest would have been paid for 1 month only.
As i understand the pvt ltd company is into the business of Investment in shares,Rental Income,Dealing in land and SIT means stock in trade, answer to your queries are as follows:
1)Yes, advance tax is required to be paid by 15th March as any profit from sale of the land will form part of normal business income of the pvt ltd co. and since the tax was paid on 17/03/11, in this case,the company is required to pay interest U/s 234C.
2) Income from sale of land which is part of stock in trade of the company is business income and the argument given by you can not be considered. the company needs to pay all the installment of advance tax. Accordingly, interest will be charged on all the installments of advance tax.
If the land would have been treated as fixed asset of the company, interest would have been paid for 1 month only.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- REGARDING GST ON COMMERICIAL PROPERTY
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- GST on export of services and Input Credit
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- TDS U/S. 194NF
- ITC temporary reversal and reclaim
- Applicable TDS rate for sale of property in Nov 2024
- Donation Receipt u/s 80G
- MIS MATCH OF INVOICE NUMBER
- VERIFICATION OF REFUND RELATED
- GST Regis.
- ITC c/f from FY2022-23 to FY2023-24 entered the same in table 8C of GSTR9 of FY 2022-23, in FY23-24
- Late filling fees Demand by gst office
- IGST Credit-Show cause notice issued-confusion
- Short and Excess provision of expenses
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
Trending Online Classes
CAclubindia
