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Outstanding tax demand

Sid Pati (Others) (25 Points)

16 December 2012

Hi All,

I was checking the income tax efiling site today and upon clicking "Outstanding Tax Demand Status" I found the following:

Outstanding tax demand: 4397 Rs.

Assessment Year: 2007

Date of demand: 2nd March, 2009 , under section 143(1)

I think 5 years back, I has submitted my IT returns correctly, but I might have messed up too. I think it would be better if I just pay this amount + whatever interest is required. But I'm not sure how to pay this amount. Do I really need to talk to a tax consultant or can I just get this done myself.

I searched this EXCELLENT site for any info on this, but can't find the steps to get this done. Could someone help me on this.

1. How to calculate interest? Somebody mentioned 1% interest since the date of demand. Is it simple interest or interest compounded annually.

2. I'm assuming I can go to ICICI site and pay this as self assessment tax. Not sure if it will give any option to submit tax for AY 2007-2008.

3. Next what do I do. Can I submit an ITR - 1

Thanks for helping out on this,

Sid

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4 Replies

satish kumar voleti (A.C.A., (ICWAI)) (1686 Points)
Replied 16 December 2012

The Income Tax Act provides for charging of interest for non- payment/short payment/deferment in payment of advance tax which is calculated as below:

(i) INTEREST U/S 234A: For late or non furnishing of return, simple interest @ 1% for every month or part thereof from the due date of filing of return to the date of furnishing of return, on the tax as determined u/s 143(1) or on regular assessment as reduced by TDS/advance tax paid or tax reliefs, if any, under Double Tax Avoidance Agreements with foreign countries.

(ii) INTEREST U/S 234B: For short fall in payment of advance tax by more than 10%, simple interest @ 1% per month or part thereof is chargeable from 1st April of the assessment year to the date of processing u/s 143(1) or to the date of completion of regular assessment, on the tax as determined u/s 143(1) or on regular assessment less advance tax paid/ TDS or tax reliefs, if any, under Double Tax Avoidance Agreements with foreign countries.

(iii) INTEREST U/S 234C: For deferment of advance tax. If advance tax paid by 15th September is less than 30% of advance tax payable, simple interest @ 1% is payable for three months on tax determined on returned income as reduced by TDS/TCS/Amount of advance tax already paid or tax relief, if any, under Double Tax Avoidance Agreement with forgiving contribution. Similarly, if amount of tax paid on or before 15th December is less than 60% of tax due on returned income, interest @ 1% per month is to be charged for 3 months on the amount stated as above. Again, if the advance tax paid by 15th March is less than tax due on returned income, interest @ 1% per month on the shortfall is to be charged for one month.

Since Advance tax payment not apply to your case so no need to pay interest....

so log into your account and pay it through online....by selecting challan 280 and check income tax other than companies, give your address. pay under code 400 tax on regular assessment...

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Sid Pati (Others) (25 Points)
Replied 17 December 2012

Thanks Satish for the detailed reply.

A few more questions from me:

1. While paying the tax in NSDL site, it is asking for Assessment year. In the income tax site, it is just mentioned as AY 2007. So can I enter AY 2007-2008 in NSDL site.

2. After paying the tax online, do I need to do anything else to get the outstanding tax demand cleared.

Thanks,

Sid

Sandy (s) (21 Points)
Replied 23 October 2014

HI Experts,

Is the process same for a salaried person. I got a additional demad for the year 2009-2010.

The amount is 690 rupees.

og into your account and pay it through online....by selecting challan 280 and check income tax other than companies, give your address. pay under code 400 tax on regular assessment...

CA Prakash (Chartered Accountant) (475 Points)
Replied 09 December 2014

If you are staisfied with the demand, you can pay outstanding tax amount appearing in the e-filing portal. However you should be careful in selecting Type of Payment code 400 (Tax on regular assessment as well as correct assessessmnt year.

More information visit article How to respond to income tax demand outstanding

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