Partnership firm

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 January 2016 Dear Sir,
I have filed one of the partnership firm itr u/s 44AD and the self assessment tax amount was about 50000/-, Execel utility did not calculate interest for not payment of advance tax ( Maybe due to firm opted Sec. 44AD). Therefore I have deposited interest only u/s 234A.

Now I have received intimation u/s 143(1), asking me to deposit interest for non-payment of advance tax. Whether I should deposit this interest or
I should file rectification u/s 154 seeking exemption from advance tax interest, as my return is filed u/s 44AD.

Please advise me.

Waiting for your valuable advise.
Thanks.

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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21 January 2016 You have to pay advance tax, even though you have filed Returns u/s 44ad. There is no relaxations in Income Tax Act for payment of advance tax. So don't delay other wise your interest payment will increase till such delay.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 January 2016 No need to pay advance tax vide 44AD(4). Seek rectification.

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KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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21 January 2016 As per section 44AD(4) of Income Tax Act, “The provisions of Chapter XVII-C shall not apply to an
eligible assessee in so far as they relate to the eligible business”. The provisions of Advance tax are
covered under Chapter XVII-C of Income tax act. As per Section 209(1) (a) of Chapter XVII-C of the
Income tax act, “where the calculation is made by the assessee, he shall first estimate his
current income and income-tax thereon shall be calculated at the rates in force in the financial year.

While computing interest u/s 234B/234C, average tax rate is applied on the income (excluding 44AD
income) by the Income Tax Department, whereas, slab rates are applied on the income (excluding
44AD income) in our software. The net effect is that, the tax liability for the purpose of calculation of
Interest u/s 234B/234C is higher in the method adopted by the department

Explanation.—For the purposes of this section,—
(a) "eligible assessee" means,—
(i) an individual, Hindu undivided family or a partnership firm, who is a resident, but not a limited liability partnership firm as defined under clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009); and
(ii) who has not claimed deduction under any of the sections 10A, 10AA, 10B, 10BA or deduction under any provisions of Chapter VIA under the heading "C.—Deductions in respect of certain incomes" in the relevant assessment year;

Querist : Anonymous

Querist : Anonymous (Querist)

21 January 2016 So what is the final gist of advice given by experts ?
Should I go for rectification or I should deposit this interest ?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 January 2016 Pl file rectification.