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Why 234 b ???

Subhendu S Sanyal (B.Com(C.S.),CA FINAL ) (666 Points)

07 August 2011

I dont just understand why 234 B is coimng for this case though more than 90% of tax laibility has been discharged thorgh TDS..Please help..

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13 Replies

Amit (Chartered Accountant B.Com(H)) (453 Points)
Replied 07 August 2011

I think this is interest under section 234A @ 1% for 5 month [ from april to aug] on balance tax payable and this is because you have failed to file your retrun with in due date as per section 139(1).

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GURSIMER SINGH (-) (76 Points)
Replied 07 August 2011

Tds is an approx amount, it is not an exact amount of tax payable, sometime assesse paid tax less then the amount of tax payable in form of tds, so income tax department charge some interest for arrears of amount... And there are three sections 234c, 234b, 234a.. For charging interest for different time periods.... And sequence of these sections are mention above..... And there are three sections 234c, 234b, 234a.. For charging interest for different time periods.... And sequence of these sections are mention above.....

Hemant Mehta (Chartered Accountant ) (234 Points)
Replied 07 August 2011

Advance tax should be deposited at least 90% of Tax liability. Here Tax Liability means total tax with cess less TDS. i.e balance tax in your case Rs. 49,131/-.Means Advance tax should be deposited 90% of Rs. 49,131/- upto 31.03.201. And further you have to pay interest U/S 234 C also which is not computed in your statement of total income.

Amit (Chartered Accountant B.Com(H)) (453 Points)
Replied 07 August 2011

yes agreed with Mr Hemant mehta. But what about 234A??

Hemant Mehta (Chartered Accountant ) (234 Points)
Replied 07 August 2011

Ya. agreed it is a penal interest for delay in fillng return it will be @ 1% p.m. from april to till the month in which return will file

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Subhendu S Sanyal (B.Com(C.S.),CA FINAL ) (666 Points)
Replied 07 August 2011

Originally posted by : Amit
	yes agreed with Mr Hemant mehta. But what about 234A??

I have assumed that Original Return has been filed on Due Date without paying Self Asst. Tax..

CA Mukul Mittal (CA in practice) (384 Points)
Replied 07 August 2011

if the total tax is already deposited by the assessee, then 234b is not applicable

bharath (student) (45 Points)
Replied 08 August 2011

HI SUBHENDU SANYAL

Ya you are right 234B is not attracted to the given case as 90% of the tax has already been paid. But there will be levy of 234C. If the return is to be filled after 31 July then there will be levy of 234A too @ 1% for every month of delay.

(Guest)

Originally posted by : bharath
	HI SUBHENDU SANYAL Ya you are right 234B is not attracted to the given case as 90% of the tax has already been paid. But there will be levy of 234C. If the return is to be filled after 31 July then there will be levy of 234A too @ 1% for every month of delay.

yes, in this case intt u/s 234 C will be charged and if return is filed after due date 31.07.2011 ,then intt u/s 234A will be charged @ 1% pm or part of month for the period subsequent to the last date of filing of retirn of income.

Amit (Chartered Accountant B.Com(H)) (453 Points)
Replied 08 August 2011

Interest under section 234(B)(1) is charged if-

(a) Advance tax paid by assessee during the previous year < 90% of assessed tax . OR

(b) No advance tax is paid by the assessee.

Here assessed tax means:-

Tax determined u/s 143(1) or on assessment u/s 143(3)/144/147/153A XXXXX

Less: Relief of tax u/s 90 -XXXXX

Less: Relief of tax u/s 90A -XXXXX

Less: Relief of tax u/s 91 -XXXXX

Less: MAT credit u/s 115JAA -XXXXX

Less: TDS/TCS -XXXXX

ASSESSED TAX xxxxxx

Now in your case assessed tax is49131.00

And advance tax paid by you=Rs.0.00 which is <90%. Thus you fall under first condition OR you can say that since you have not paid advance tax at all you fall under second condition. Hence section 234(B)(1) is applicable on you.

Section 234A. is also applicable because you have failed to file your return under section 139(1). Interest is to be calculated for the period from 01.08[commences from the date next following the due date specified u/s 139(1) till you file your return on the amount of self assessment tax payable. Self assessment tax paid on or before due date of filing shall not be considered for calculating interest [ CIT v. Pranoy Roy [2009] 309 ITR 231/179 Taxman 53 (SC) [Para 5]].

Section 234C-is also applicable. Interest under this section is chargeable when there is deferment instalments of advance tax or advance tax is not paid at all and there is selfassessment tax payable at the end of the previous year.

Now as regarding your assumtion of filing of return on time without paying the selfassessment tax is concerned i think in this case as per section 140A you will be deemed to be an assessee in default in respect of tax and interest remaining unpaid. And in this case you shall have to pay interest under section 220 and penalty under section 221 for being an assessee in default.

And yes if you have filed your return in time you will be escaped from Section 234A.

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Subhendu S Sanyal (B.Com(C.S.),CA FINAL ) (666 Points)
Replied 08 August 2011

Mansha , Mr. Amit and all others,

I am satisfied about the explanation given regarding 234 A & B but I want some clarifications regarding 234 C:-

Suppose the Sale of shares has taken place between 16th March 2011-31 st March 2011. ..then whether 234C will be attracted. ??

Please clarify...

Amit (Chartered Accountant B.Com(H)) (453 Points)
Replied 08 August 2011

Please refer first proviso to section 234C. As per this proviso the provision of section 234C shall not apply to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of under-estimate or failure to estimate-

(a) the amount of capital gains -Ltcg/stcg,

(b) income by way of winning from lotteries,crossword puzzles, races, card games, gambling etc.

and the assessee has paid the whole of the amount of tax payable in respect of the incomes referred in (a) and (b)above as part of the remaining instalments of advance tax which are due, or where no such instalment is due, by 31st March of the financial year.

In your case advance tax has not been paid till 31.03.2011 at all. Hence this proviso is not applicable to you.

(Guest)

Yes ,Interest u/s 234 C will be attracted on sale of shares during 16.3.2011 -31.3.2011.

As per [Section 211] Instalments of advance tax and due dates -

last instalment -up to 15 th march of f.yr -100% tax liability of financial year should be paid .

However ,if there is any deficieny ,it should be paid up to 31st march of that financial year with penal interest for late payment u/s 234 C ,otherwise assessee has to pay interest u/s 234B also .

If assessee has paid entire amount of taxes up to 31 st march of Previous year , no intt will be charged u/s 234B otherwise intt will be charged u/s 234B @ 1%per month or part of month up to date of payment starting from 1.4 of A.yr