Relief u/s 89 & interest u/s234b & 234 c

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ONE OF OUR CLIENT HAD RECEIVED ARREARS OF SALARY FOR THE AY 2017-18 AND RELIEF U/S 89 HAD CLAIMED AND BALANCE TAX DEDUCTED BY HIS EMPLOYER. WE HAD FILED RETURN OF INCOME BEFORE DUE DATE ITSELF AND UPLOADED FORM 10 E ONLINE. NOW INTIMATION FROM IT DEPARTMENT RECEIVED WHICH DEMANDS INTEREST U/S 234B & 234C ON THE RELIEF AMOUNT CLAIMED. ON VERIFICATION OF THE SECTION , I UNDERSTAND THAT FOR CALCULATING INTEREST U/S 234B & 234 C RELIEF U/S 89 SHALL NOT BE DEDUTIBLE FROM THE TOTAL TAX. BUT I THINK IT HAS NO LOGIC IN IT. IS DEPARTMENT'S VIEW IS CORRECT ? I NEED CLARIFICATION ON THIS. CAN YOU PLEASE HELP ME . 

 

Replies (5)

The logic is, while claiming relief of tax which was suppossed to be paid in that particular year, department is getting the payment in year of  relief claimed.

Though the assessee is also getting the payment in previous year, but department charges interest over late receipt of tax (i.e. in PY though due in the year if relief claimed))

Dear Dhirajlal sir, Interest u/s 234 B/C are calculated on the late of payment of Tax. But in the case of Relief u/s 89 there is no payment of Tax. Since why that Interest u/s234B/C claimed on that unpaid amount. So there may be any error in CPC processing. Because the ITR preparation utility given by the ITD is not charging  any Interest while preparing the Return. CPC only generated notice when processing. So a systematic approach needed sir. Please clarify sir.

"Because the ITR preparation utility given by the ITD is not charging  any Interest while preparing the Return. CPC only generated notice when processing. So a systematic approach needed"

 

Yes, that is true, but that makes utility very combursome, and for assessee it doesn't matter whether to  pay interest while claiming relief, or when demand raised.

yes sir. Thanks for the quick revert. We and client are met with headache. How can we communicate this issue to CPC Bengalore sir. Is there any mode for it. Let me know it. 

Such issues are handled by ICAI in systemic manner. Individual reporting may not help. There are many such issues which we are suffering now, but no immediate solution. Better write it to help @


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