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Report No. 12

223. Interest payable by assessee.-

(1) Where in any financial year an assessee has paid advance tax under section 220(1) or 220(2) [sub-section (2) of section 18A] or section 220(3) [sub-section (3) of section 18A] on the basis of his own estimate, and the advance tax-so paid is less than eighty per cent, of the tax determined on the basis of the regular assessment, so far as such tax relates to income subject to advance tax and so far as it is not due to variations in the rates of tax made by the Finance Act enacted for the year for which the regular assessment is made, simple interest at the rate of four per cent.1 per annum from the 1st day of April next following the said financial year up to the date of the said regular assessment shall be payable by the assessee upon the amount by which the advance tax so paid falls short of the said eighty per cent.

[Section 18A(6), main para., and 1st proviso]

(2) Where provisional assessment is made under section 145 [2313],-

(i) interest shall be calculated in accordance with the foregoing provision up to the date on which the tax as provisionally assessed is paid, and

(ii) thereafter interest shall be calculated at the rate aforesaid on the amount by which the tax as so assessed (in so far as it relates to income subject to advance tax) falls short of the said eighty per cent.

[Section 18A(6), 2nd proviso]

(3) Where as a result of an order under section 259 [31] or section 272 [33A] or section 161 or 162 [35] or section 263 [66], or section 269 [66A], the amount on which interest was payable under this section has been reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded together with the amount of income-tax that is refundable.

[Section 18A(6), 3rd proviso]

(4) In such cases and under such circumstances as may be prescribed, the Income-tax Officer may reduce or waive the interest payable by the assessee under this section.

[Section 18A(6), 5th proviso]

Income-Tax Act, 1922 Back

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