Interest under section 234B(2A)(a) - Settlement Commission Case

[Akshay Jain]

As per the Section.... Interest has to be calculated at 1% from the start of that Assessment year upto the date of filing of application to ITSC.... Is the interest to be calculated on the outstanding tax per month or on the entire tax

Eg

Suppose tax payable is 1,00,000 for AY 2010-11.

An amount of ₹ 80,000 was paid on 31.3.2014.

Date of filing ITSC application is 15/01/2016

Logically interest has to be calculated on 1,00,000 upto 31.3.2014 and then interest has to be calculated on the balance tax from 1.4.2014 to 15/01/2016...

Kindly update...

AI Summary

Interest Calculation Debate Under Section 234B(2A)(a): Full Tax vs. Outstanding Balance in Settlement Cases A discussion was initiated regarding the calculation of interest under Section 234B(2A)(a) in a Settlement Commission case. The query involved whether interest should be calculated on the entire tax amount or only on the outstanding tax. An example was provided where a tax of 1,00,000 was partially paid, and interest calculation was questioned from the start of the assessment year until the filing of the ITSC application. Respondents agreed that interest should be calculated on the full amount until partial payment, then on the remaining balance until the application date.