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advance tax payment

Amit Gupta (Employee) (128 Points)

04 June 2009

Hi,

My total tax for 2008-09 was 160000. I paid Rs 140000 before 31-march-09.

Am I required to pay penel interest on remaining 20000?

Regards

Amit

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11 Replies

RAMANJU (here to updating the knowledge) (485 Points)
Replied 04 June 2009

Under the provisions of IT act ( section 234B), if the amount paid as advance tax is less than 90% of assessed tax, then 1 % per month or part of the month on the amount of short fall shall be paid as penal interest from 1st of April of next following year to the date of amount actually paid.

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RAMANJU (here to updating the knowledge) (485 Points)
Replied 04 June 2009

In your case it is yes, you will have to pay penal interest from 1st of April as the advance tax paid is less then 90% of assessed tax.

Jiwan singh (service) (393 Points)
Replied 04 June 2009

You have to pay simple interest @ 1% on 4000/- u/s 234 B,

As an assessee who has paid advance tax but the amount of advance tax paid by him is less than 90% on assessed tax - simple interest @ 1%

RAMANJU (here to updating the knowledge) (485 Points)
Replied 04 June 2009

Penal interest at 1% pm to be calculated on the amount of short fall. In your case it is on Rs. 20,000. Request to Mr. Jiwan to get clarified on this.

PRAVEEN KUMAR (MBA (Finance) B.Com.(P)) (3443 Points)
Replied 04 June 2009

Yes, Mr Ramanju is right

1% pm to be calculated on the amount of short fall. In your case it is on Rs. 20,000

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Jiwan singh (service) (393 Points)
Replied 05 June 2009

I am extreemly sorry

interest 1% on 20000/- not in 4000/-

Amit Gupta (Employee) (128 Points)
Replied 05 June 2009

Hi,

What if I paid 10000 in may and rest now?

Regards

Amit

RAMANJU (here to updating the knowledge) (485 Points)
Replied 05 June 2009

Till May, the penal interest of 1% per month is on Rs. 20000 and thereafter it is on Rs. 10,000 till you pay the rest.

Amit Gupta (Employee) (128 Points)
Replied 08 June 2009

Thanks every one for responses. This will be called as "interest due to deferment of advance tax (section 234C)" or " default in payment of advance tax(section 234B)" ?

Amit Gupta (Employee) (128 Points)
Replied 09 June 2009

Look forward to your responses to

"Thanks every one for responses. This will be called as "interest due to deferment of advance tax (section 234C)" or " default in payment of advance tax(section 234B)" ?"

Amit

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sanjay patil (job) (22 Points)
Replied 23 July 2009

what is the provision of income tax if 90% or more of advance tax has been paid during the year. can we pay balance tax ie.10% or less is to be paid without interest.