March 13, 2014

CA-CS-ICWA-TAX PROFESSIONALS-PORTAL-INCOME TAX ACT -1961 CONCEPTS ADVANCE TAX , SECTIONS 234A , SEC 234B , SEC 234C - COMPUTATION OF INTEREST LIABILITY ON INCOME TAX PAYABLE WITH EXAMPLE

 UNIVERSAL KNOWLEDGE HUB

ADVANCE TAX/INTEREST CALCULATOR ALONG WITH INCOME TAX A/Y 2013-2014


       http://students.chdcaprofessionals.com/p/tax-calculator.html   

  ADVANCE TAX - Advance tax shall be payable during a financial year in every case where the amount of such tax payable by the assessee during that year, as computed  is ten thousand rupees or more. 

Note - The Finance Act, 2012, provides that in case of a senior citizen, advance tax provisions would not apply in case such a senior citizen does not have income from business or profession. A senior citizen assessee can, therefore,discharge his tax liability at the time of filing the tax return and pay the tax under self-assessment scheme.




COMPUTATION OF ADVANCE TAX     CLICK HERE TO VIEW 

ADVANCE TAX  DUE DATES  -               CLICK HERE TO VIEW

SECTIONS 234A       -            CLICK HERE TO VIEW  FULL TEXT  


WHERE THE RETURN OF INCOME FOR EVERY ASSESSMENT YEAR IS FURNISHED AFTER THE DUE DATE I.E 31ST AUGUST ( NON TAX AUDIT ) OR  31ST OCTOBER ( NON TAX AUDIT - UTTARAKHAND ASSESSEE ) , 30TH SEPTEMBER (TAX AUDIT / COMPANY AUDIT  ) OR 14 OCTOBER ( TAX AUDIT / COMPANY AUDIT - GUJRAT ASSESSEE ) OR 30TH NOVEMBER ( INTERNATIONAL TRANSACTIONS UNDER 92E ) AS THE CASE MAY BE - SIMPLE INTEREST IS PAYABLE AT 1 %  FOR EVERY MONTH OR PART OF A MONTH  COMPRISED IN THE PERIOD COMMENCING ON THE DATE IMMEDIATELY FOLLOWING THE DUE DATE AND,—

(A)  WHERE THE RETURN IS FURNISHED AFTER THE DUE DATE, ENDING ON THE DATE OF FURNISHING OF THE RETURN; OR


      (B)  WHERE NO RETURN HAS BEEN FURNISHED, ENDING ON THE DATE OF   COMPLETION OF THE   ASSESSMENT UNDER SECTION 144

ON THE AMOUNT OF TAX ON TOTAL INCOME AS REDUCED BY AMOUNT OF ,

 (i)  advance tax, if any, paid;
(ii)  any tax deducted or collected at source;
(iii)  any relief of tax allowed under section 90 on account of tax paid in a country outside India;
(iv)  any relief of tax allowed under section 90A on account of tax paid in a specified territory outside India referred to in that section;
(v)  any deduction, from the Indian income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and
(vi)  any tax credit allowed to be set off in accordance with the provisions of section 115JAA [or section 115JD ]

CIRCULAR 2 / 2015 - Chargeability of interest under section 234A of the Income-tax Act, 1961 on self-assessment tax paid before the due date of filing of return of income

SECTION    234B       -      CLICK HERE TO VIEW FULL TEXT  
    
APPLICABLITY  - WHEN ADVANCE TAX IS NOT PAID OR LESS PAID (90% OF ASSESSED TAX) DURING THE FINANCIAL YEAR. 

AMOUNT - SIMPLE INTEREST AT THE RATE OF ONE PER CENT FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD FROM THE 1ST DAY OF APRIL NEXT FOLLOWING SUCH FINANCIAL YEAR TO THE DATE OF DETERMINATION OF TOTAL INCOME UNDER SUB-SECTION (1) OF SECTION 143  [AND WHERE A REGULAR ASSESSMENT IS MADE, TO THE DATE OF SUCH REGULAR ASSESSMENT ON AN AMOUNT  EQUAL TO THE ASSESSED TAX OR ON THE AMOUNT BY WHICH THE ADVANCE TAX PAID FALLS SHORT OF THE ASSESSED TAX.

ASSESSED TAX" MEANS THE TAX ON THE TOTAL INCOME DETERMINED UNDER SUB-SECTION (1) OF SECTION 143 AND WHERE A REGULAR ASSESSMENT IS MADE, THE TAX ON THE TOTAL INCOME DETERMINED UNDER SUCH REGULAR ASSESSMENT AS REDUCED BY THE AMOUNT OF,

(i)  any tax deducted or collected at source;
(ii)  any relief of tax allowed under section 90 on account of tax paid in a country outside India;
(iii)  any relief of tax allowed under section 90A on account of tax paid in a specified territory outside India referred to in that section;
(iv)  any deduction, from the Indian income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and
(v)  any tax credit allowed to be set off in accordance with the provisions of section 115JAA [or section 115JD ]

SECTION    234C       -        CLICK HERE TO VIEW  

APPLICABLITY  - WHEN ADVANCE TAX IS NOT PAID OR LESS PAID ON DUE DATES.

EXAMPLE  -  AN INDIVIDUAL ASSESSEE AGED 40 YEARS HAS TAXABLE INCOME RS. 3,80,200 FOR A/Y 2013-14 AND HE IS FILING HIS RETURN ON 4 AUG 2013.DETERMINE TAX PAYABLE ALONG WITH INTEREST.

COMPUTATION OF INTEREST U/S 234A 234B 234C

INCOME TAX PAYABLE   -   180200*10%   =  18020
EDUCATION CESS                 180200*3%     =    541
TOTAL TAX PAYABLE                                   =   18561
       
FOR CALCULATION PURPOSE ROUND OFF AMOUNT IN 100 I.E 18500 WILL BE USED FOR CALCULATION PURPOSE

INTEREST U/S 234A  -  18500* 1% * 1 MONTH =      185

INTEREST U/S 234B  -  18500*  1% * 5 MONTH (1 APR TO - 4 AUG ) =  925

INTEREST U/S 234A 

IST INSTALLMENT DUE   15 SEP - 18500*30% = 5550 * 1% * 3 (MONTHS)= 167 (ROUND OFF)
2ND INSTALLMENT DUE  15 DEC- 18500*60% = 11100-0 (EARLIER PAID IN INSTALLMENT) * 1 % * 3 (MONTHS)= 333 (ROUND OFF)
3RD INSTALLMENT  15 MARCH    -   18500 - 0 (EARLIER PAID IN INSTALLMENTS)    
                                                            =   18500 * 1% =  185   

TOTAL INTEREST U/S 234C  -    685

TOTAL INTEREST PAYABLE -  185+925+685 = 1795

TOTAL TAX PAYABLE  -  =18561+1795=  20356 ROUNDED OFF TO NEAREST 10 = 20360

NOTE - IN ABOVE EXAMPLE IF TAX OF RS. 18561 IS PAID ON IST JUNE 2013 AND RETURN IS FILED ON 4TH AUG , CALCULATION OF INTEREST WILL BE AS FOLLOWS

SEC 234A  -  SAME AS ABOVE
SEC 234C  -  SAME AS ABOVE
SEC 234B  -  18500 * 1 % * 3  MONTH (I APR - I JUNE ) = 555

PLUS  1% INTEREST FOR 2 MONTHS ON BELOW AMOUNTS

SEC 234A                                                  -  185    
SEC 234B TILL PAYMENT DATE                -  555 ( 18500 * 1% * 3 MONTH ( 1 APR - 1 JUNE)
SEC 234C                                                   -  685
TOTAL                                                       -   1425 ROUNDED OFF TO 1400.     

ADDITIONAL INTEREST U/S 234B - 1400 * 1% * 2 (MONTHS) = 28
TOTAL INTERST U/S 234B - 555+28 = 583

  
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