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

[Guest]

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...

[DR.MARIAPPAN GOVINDARAJAN]

In my view yours is correct.

[Ganeshan Kalyani]

Interest is applicable on outstanding period.

AI Summary

Interest on outstanding tax: calculate on full tax until payment, then on the remaining balance until ITSC application filing. Interest accrues from the start of the assessment year to the Settlement Commission filing date; when a part payment occurs, compute interest on the full tax up to the payment date and on the unpaid balance from the payment date until filing, so that interest applies to the outstanding tax for each sub period.