Interest u/s 234 a,b,c
This query is : Resolved
21 April 2012
dear experts i have copied this question from the forum and want more opinion
on it
"My Comapny was incorporated under Companies Act, 1956 on 12.07.2007 and entitled to commence business from 31.07.2007.
Entered its first Agreement 01.10.2007.As per Agreement, we raised 1st Invoice on 23.11.2007 towards Advance payment after execution of Contract and before commencement of Work.
we started the work on this project from 24.01.2008 onwards, Income for the AY 2008-09 booked in the 4th Qtr only and paid Advance tax for last Qtr.
Does Sec 234(C) will applicable for other all four qtr or for 4th Qtr only.
"
on it
"My Comapny was incorporated under Companies Act, 1956 on 12.07.2007 and entitled to commence business from 31.07.2007.
Entered its first Agreement 01.10.2007.As per Agreement, we raised 1st Invoice on 23.11.2007 towards Advance payment after execution of Contract and before commencement of Work.
we started the work on this project from 24.01.2008 onwards, Income for the AY 2008-09 booked in the 4th Qtr only and paid Advance tax for last Qtr.
Does Sec 234(C) will applicable for other all four qtr or for 4th Qtr only.
"
22 April 2012
Since it is the business income all quarter will be applicable this exemption from interest is applicable qtr wise for Capital Gains.
22 April 2012
sir but the company is getting incorporated in the second quarter .
this is what is confusing me ....
this is what is confusing me ....
22 April 2012
"Where in any financial year, - (a) The company which is liable to pay advance tax under section 208 has failed to pay such tax"
or
"The advance tax paid by the company 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"
It is very much cleared from the wordings that since the company was not in existence on 15th June, it will not be possible for the company to pay tax till that date. Thus interest calculation will start from 2nd quarter even though income starts later on.
or
"The advance tax paid by the company 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"
It is very much cleared from the wordings that since the company was not in existence on 15th June, it will not be possible for the company to pay tax till that date. Thus interest calculation will start from 2nd quarter even though income starts later on.
22 April 2012
1) Since the assessee was not in existence for the first quarter the advance tax liability for the first quarter does not arise.
2) However Interest u/s 234C for the second, third and fourth quarter will be applicable.
3) Take the following example:-
April to Feb : Loss of 1000 crores
March : Profit of Rs. 5000 cores
Total Year : Profit of Rs. 4000 crores
Interest u/s 234C will be payable for all the quarter.
2) However Interest u/s 234C for the second, third and fourth quarter will be applicable.
3) Take the following example:-
April to Feb : Loss of 1000 crores
March : Profit of Rs. 5000 cores
Total Year : Profit of Rs. 4000 crores
Interest u/s 234C will be payable for all the quarter.
23 April 2012
The literaligis of 234 C is unambiguous. (It may not be giving considerations for 'in between' born companies) As a consultant / CA, one should have intimated the management in June/ July 2007, to budget the interest u/s 234 C, if company makes a taxable profit.
23 April 2012
lets see if we can get some more opinion
01 August 2024
https://docs.google.com/document/d/1qtih7QU8GPy0eZo2p_DizQLntS6UF-OenZ68ujlc5yI/edit?usp=sharing
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