Just a moment...

Top
Help
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws----
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ----
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
RelevanceDefaultDate
    NewsBills
    Extension of date of incorporation for eligible start-up for exemption
    NewsBills
    Relief to start-ups in carrying forward and setting off of losses
    NewsBills
    Penalty for cash loan/ transactions against primary co-operatives
    NewsBills
    Increasing threshold limit for co-operatives to withdraw cash without TDS
    NewsBills
    Relief to sugar co-operatives from past demand
    NewsBills
    Agnipath Scheme, 2022
    NewsBills
    Promoting timely payments to Micro and Small Enterprises
    Power of NCLT/NCLAT vis-à-vis writ jurisdiction of the high court.
    Case LawsIndian Laws
    Corporate Debtor includes a corporate guarantor even if Principal Borrower being an individual/sole ...
    Case LawsCentral Excise
    Interpretation of term "basic excise duty".
    Case LawsIndian Laws
    Amendments to the Code of Civil Procedure, 1908 by the Amendment Act 46 of 1999 and Amendment Act 2...
    Limitation Act and the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankr...
    An insight into Advance Ruling and the functioning of the Authority for Advance Ruling (AAR).
    Case LawsCustoms
    Show cause notice issued by Additional Director General-Directorate of Revenue Intelligence is not a...
    Writ Petition cannot be a tool to escape the statutory remedies available under the law-Supreme Cour...
    Case LawsIncome Tax
    Reassessment conducted after 4 years by Income Tax Authorities.
    Case LawsService Tax
    Principles of Natural Justice upheld by the Court/s.
    Case LawsIndian Laws
    Liberal interpretation of limitation law by the supreme court in covid-19 phase.
    Case LawsCustoms
    Examining the legality of confiscation of an Imported car.
    Case LawsCustoms
    Show cause notice non est in the eyes of law for want of jurisdiction of the authority issuing it.
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

    Are you sure you want to delete "My most important" ?

    NOTE:

    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    NewsBills
    Show AI Summary
    Extension of start up incorporation cutoff expands section 80 IAC eligibility, applying from the stated effective assessment year onward.
    The amendment extends the incorporation cutoff so that enterprises incorporated on or before 1st April 2024 qualify as eligible start ups for the three year full deduction under section 80 IAC, subject to the existing turnover ceiling, Inter Ministerial Board certification and other statutory conditions, and is to have effect from 1st April 2023 for the relevant assessment year and subsequent years.
    NewsBills
    Show AI Summary
    Carry-forward loss relief extended for startups, easing shareholding continuity requirement to permit set-off of past losses.
    Amendment extends the proviso to the carry forward and set off rule so that eligible start-ups may set off carried forward losses incurred within ten years of incorporation under the existing shareholders-continuity relaxation, aligning this period with the ten-year reference in the start-up incentive provision; the change applies from the assessment year 2023-24.
    NewsBills
    Show AI Summary
    Cash transaction limit relief for primary co operatives raises the threshold before penalty for member transactions.
    The amendments raise the electronic payment threshold for primary agricultural credit societies and primary co operative agricultural and rural development banks so that acceptance of loans or deposits from, or repayment to, their members will be required to be by account payee cheque, account payee bank draft or online bank transfer only where the amount equals or exceeds two lakh rupees; penalties will attach only above that threshold.
    NewsBills
    Show AI Summary
    TDS threshold for co-operative societies increased, altering cash withdrawal TDS applicability and retaining higher deduction rates for non-filers.
    The Finance Bill, 2023 amends Section 194N to treat co-operative societies as if the statutory cash-withdrawal TDS threshold were replaced by a higher threshold for the purpose of that section, effective from the start of the next financial year, while preserving the existing non-filer deduction rates and the statutory definition of non-filer.
    NewsBills
    Show AI Summary
    Deductibility of sugarcane purchase price: recomputation permitted for co-operative mills where prices meet government-fixed approvals.
    Confirms that payments by sugar co-operative mills for purchase of sugarcane at prices equal to or less than government-fixed or approved rates are allowable as a deduction for computing business income. Where such deductions were previously claimed and disallowed, an assessee may apply to the tax authority for recomputation of total income for the relevant previous year; the authority must allow the deduction to the extent the expenditure meets the qualifying price condition and apply rectification provisions and the prescribed processing period.
    NewsBills
    Show AI Summary
    Agniveer Corpus Fund tax exemption: contributions and Seva Nidhi receipts exempt, government contribution treated as salary with deduction.
    The Agnipath Scheme creates a non-lapsable Agniveer Corpus Fund holding Agniveer contributions, matching Government contributions and interest; Seva Nidhi is the one-time terminal package payable on completion of engagement. The Finance Bill proposes to exempt Seva Nidhi receipts from income tax and to permit deduction from total income of both the Agniveer's deposits and the Government's matching contributions, while treating the Government contribution as salary with a corresponding deduction and extending a similar deduction in the new tax regime.
    NewsBills
    Show AI Summary
    Payment timing for micro and small enterprises: tax deduction allowed only on actual payment when MSMED timelines are missed.
    An amendment to Section 43B inserts a clause disallowing accrual-based deduction for sums payable to micro and small enterprises when payment is made after the time limits prescribed by the MSMED Act; the proviso to Section 43B will not apply to such payments, and only payments made within the MSMED timelines qualify for accrual-based deduction.
    Case LawsIBC
    Show AI Summary
    Writ jurisdiction protects review where specialised tribunals act beyond statutory powers; tribunals may only inquire into fraud.
    Writ jurisdiction remains available to correct a tribunal acting without statutory power; NCLT lacked jurisdiction to adjudicate MMDR Act lease disputes, so a writ challenging its order was justified. NCLT/NCLAT may inquire into allegations of fraud in CIRP, but they cannot adjudicate substantive statutory or quasi judicial disputes that require judicial review of administrative action.
    Case LawsIndian Laws
    Show AI Summary
    Corporate guarantor liability: written acknowledgement restarts limitation and permits insolvency proceedings against the corporate debtor.
    A corporate guarantor qualifies as a corporate debtor liable to insolvency proceedings where its liability mirrors the principal borrower's, and a written acknowledgement of liability restarts the limitation period, enabling a financial creditor to initiate insolvency proceedings despite an earlier default date; factual and other objections remain open for merit-based adjudication in the insolvency forum.
    Case LawsCentral Excise
    Show AI Summary
    Interpretation of basic excise duty: exemptions do not extend to separately enacted cesses or ancillary excise levies.
    An exemption of basic excise duty must be given a strict, literal construction limited to that duty alone; it does not extend to duties or cesses-such as National Calamity Contingent Duty, education cesses, additional or auxiliary excise duties-that are imposed by different legislation or for different purposes.
    Case LawsIndian Laws
    Show AI Summary
    Procedural Amendments to Civil Procedure reinforce expedited summons, alternative dispute resolution and affidavit-based witness examination.
    The Supreme Court upheld the 1999 and 2002 amendments to the Code of Civil Procedure as procedural reforms to expedite litigation. Key clarifications include issuance of summons within thirty days under Section 27 provided plaintiffs have completed enabling steps; promotion of Alternative Dispute Resolution under Section 89 with suggested rules and case management; Order 7 Rule 11 permitting rejection of plaints for specified noncompliance but allowing rectification; and Order 18 Rule 4 requiring examination-in-chief by affidavit subject to court discretion and permitting mechanical recording of evidence.
    Case LawsIBC
    Show AI Summary
    Acknowledgement of debt extends limitation for IBC filings; recovery certificate or decree creates fresh cause of action to initiate CIRP.
    An acknowledgment in writing by a corporate debtor of a subsisting liability restarts the limitation period for initiating CIRP; a final judgment, decree or a recovery certificate, if dues remain unpaid, gives rise to a fresh cause of action permitting a financial creditor to initiate insolvency proceedings within the applicable limitation period measured from the date of that judgment, decree or certificate. Limitation questions are mixed fact and law issues requiring pleaded facts and evidence, and pleadings in an insolvency petition may be amended or supplemented when appropriate.
    Case LawsGST
    Show AI Summary
    Advance ruling immunity limitation: pending enforcement investigations bar AAR consideration and provide no protection.
    The advance ruling mechanism provides tax certainty for proposed or completed transactions, but is inapplicable where the same question is the subject of enforcement proceedings. An applicant seeking a rate and classification ruling for works for a central housing body was found to have concurrent enforcement enquiries and prior inspection, search and seizure, bringing the case within the statutory proviso that excludes advance ruling consideration; clarification that "proceedings" covers enforcement chapters reinforces that AAR cannot provide immunity from ongoing investigations.
    Case LawsCustoms
    Show AI Summary
    Proper officer requirement invalidates notices issued by unauthorized DRI officials; statutory authority required for issuance.
    A show cause notice issued by an Additional Director General of the Directorate of Revenue Intelligence was held not to be issued by a proper officer under the Customs Act, 1962; show cause notices must originate from an authority expressly empowered by statute, rule, notification or other lawful instrument, and notices issued by officers outside the statutory definition of proper officer lack validity and cannot ground further proceedings.
    Case LawsGST
    Show AI Summary
    Writ petition as bypass of statutory remedies is impermissible; statutory remedy under tax law must be pursued first.
    Writ petitions cannot be used to bypass available statutory remedies in tax matters; where a statutory remedy under the GST law exists, a taxpayer must pursue that remedy before invoking writ jurisdiction. In the present facts, detention of goods and demand of tax and penalty led to a writ challenge which the High Court entertained on factual grounds, but the superior forum set aside that order and directed pursuit of the statutory remedy, noting the narrow exceptions permitting writ relief were not shown.
    Case LawsIncome Tax
    Show AI Summary
    Reopening assessments beyond four years barred where full and true disclosure eliminates omission to disclose material facts.
    Reopening an assessment beyond four years is permissible only if there was an omission to disclose material facts; where the assessee had fully and truly disclosed loan and interest details and the assessing officer merely sought a different view on deduction versus capitalization using the same material, the condition precedent for reopening under the proviso is not met and the notice to reopen cannot be sustained.
    Case LawsService Tax
    Show AI Summary
    Principles of natural justice require hearing before rejecting an SVLDRS declaration, prompting fresh reconsideration with a speaking order.
    An administrative rejection of an application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 for alleged ineligibility was found to have failed procedural fairness by denying notice and hearing. The court required the Designated Committee to reconsider the declaration after affording the applicant a hearing with prior intimation and to issue a reasoned speaking order reflecting the scheme's remedial purpose.
    Case LawsIndian Laws
    Show AI Summary
    Extension of limitation period grants a 90-day filing window from March, or the longer balance where applicable.
    Suo motu measures made the period from 15.03.2020 to 28.02.2022 excluded from computation of limitation and made any balance of limitation available from 01.03.2022; where limitation expired in that window, a 90 day period from 01.03.2022 applies, subject to any longer balance. The exclusion covers arbitration, commercial courts, negotiable instruments and related periods for instituting proceedings, condoning delay and termination timelines.
    Case LawsCustoms
    Show AI Summary
    Option to pay fine in lieu of confiscation: reassess imported used car value and penalty before absolute confiscation.
    Rejection of the declared transaction value of an imported used car cannot rest solely on a Chartered Engineer report without due consideration of the importer's documentary submissions; where importation was not prohibited and only a policy condition on prior foreign use was breached, the authority must re determine assessable value and consider the option to pay a fine in lieu of confiscation, including reassessment of penalty quantum and incidental charges.
    Case LawsCustoms
    Show AI Summary
    Jurisdictional validity of show-cause notices: notices by officers lacking statutory authority are invalid and challengeable despite alternate remedies.
    Show-cause notices issued by officers of the Directorate of Revenue Intelligence who are not proper officers under the statutory scheme suffer from a jurisdictional defect and are non est; where proceedings are wholly without jurisdiction an alternate remedy does not preclude challenge, and show-cause notices must have statutory backing and not be used as instruments of harassment.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters

      Comparison of section 423 "Interest for defaults in furnishing return of income." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

      15 September, 2025

      Contents
      Acts
      Rules & Regulations
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Section 423 Interest for defaults in furnishing return of income.

      Income-tax Act, 2025

      At a Glance

      Document compared: Section 423 of the Income-tax Act, 2025 (as appearing in the enacted Act) and Clause 423 of the Income Tax Bill, 2025 (Old Version) (the Bill text supplied). Both texts deal with interest for defaults in furnishing return of income. The provisions affect taxpayers required to furnish returns, and the income-tax department in calculating and demanding interest. Effective date or decision date: Not stated in the document.

      Background & Scope

      Statutory hook: Clause 423 in the Income Tax Bill, 2025 - Old Version (hereinafter "Clause 423 (Bill)"). Subject matter: interest chargeable for defaults in furnishing return of income. Coverage: outlines when simple interest at the rate implicit in the formula I = 1% x A x T becomes payable, defines the starting and ending dates for computation across specified circumstances, prescribes treatment where post-assessment orders alter tax, and defines components included in "tax paid". Definitions or explanations provided in the text: limited to the formula and the Table; the Bill supplies a definition of "tax paid" in sub-section (4)(d) with enumerated items (i)-(vii). No separate definitions section is provided.

      Statutory Provision Mode

      Text & Scope

      Clause 423 imposes simple interest for defaults in furnishing a return of income. The interest is computed by the formula I = 1% x A x T, where A is the "amount of tax on which interest is payable" (as specified in sub-section (2)) and T is the number of months comprised in the period commencing on the day after the "starting date" and ending on the "ending date" specified in the Table. Sub-section (2) contains a Table that maps specific circumstances to starting date, ending date and the tax base (A) for interest computation. The Table covers four scenarios: (1) return furnished u/s 263(1), (4) or (6) or in response to a notice u/s 268(1) after the due date; (2) no return furnished under the said sections; (3) return required by a notice under an unspecified section issued after certain determinations and furnished late; and (4) where such a notice requires a return and no return is furnished. Sub-section (3) deals with the consequence of orders (under a list of sections) that increase or reduce the tax base for interest, prescribing issuance of notice of demand in prescribed form where interest increases, and refund of excess interest where interest is reduced. Sub-section (4) contains qualifying notes, including exclusions of additional income-tax u/s 267 from the tax bases, reduction of interest payable by amounts of interest paid u/s 266, and the detailed meaning of "tax paid". Sub-section (5) treats an assessment made for the first time u/s 279 as a "regular assessment" for purposes of the section.

      Interpretation

      Legislative intent as indicated by the Bill text: to provide a simple, uniform interest formula for late or non-furnishing of returns and to tie the interest computation periods to concrete events (due date, date of furnishing, date of completion of assessment, dates specified in notices). The Table-driven approach indicates an intent to vary the tax base (A) and the start/end dates according to factual circumstances of how and when returns are filed or not filed. The inclusion of a detailed "tax paid" definition shows an intent to net off various prepayments and credits from the tax base when computing interest. The provision for adjustment upon post-assessment orders (sub-section (3)) manifests an intent to align interest levies with the final assessed tax position.

      Exceptions/Provisos

      Carve-outs or qualifications present in the Bill include:

      • Exclusion of additional income-tax u/s 267 from the tax base (4)(a)-(b).
      • Reduction of interest payable by interest already paid u/s 266 (4)(c).
      • Specific items constituting "tax paid" (4)(d)(i)-(vii), which serve as offsets against the tax base for interest calculation.
      • Where an assessment is made for the first time u/s 279, it is to be regarded as a regular assessment (5).

      Illustrations

      • Example 1: A return filed late in response to a notice u/s 268(1). Starting date is the due date u/s 263(1); ending date is date of furnishing; A is tax on total income as determined u/s 270(1) (if regular assessment not made) or tax determined under regular assessment, reduced by "tax paid". (All other specifics of amounts and dates Not stated in the document.)
      • Example 2: No return furnished in response to a notice u/s 268(1). Starting date is due date u/s 263(1); ending date is date of completion of assessment u/s 271; A is tax on total income determined under regular assessment reduced by "tax paid". (Concrete amounts and computation Not stated in the document.)
      • Example 3: Return required by a notice (serial number 3) but furnished after expiry of time allowed under such notice. Starting date is the date immediately following the last date of time allowed under such notice (Bill text); ending date is date of furnishing; A is amount by which reassessed tax exceeds earlier tax. (The Bill text contains an omission in the cross-reference to the notice section; specifics Not stated in the document.)

      Interplay

      The Bill text expressly references multiple other provisions (sections 263, 268, 270, 271, 279, 280, 266, 267, 287, 288, 289, 359, 363, 365(10), 368, 377, 378, 206). Interplay with those provisions is central to determining starting/ending dates, the tax base (A), and credits. The Bill, as supplied, contains at least one omitted cross-reference (a missing section number in the Table at serial number 3) and a differing cross-reference for the tax credit clause (206(13) vs the multi-paragraph references in the Act). These differences create potential interpretive issues and could require reconciliation with the substantive provisions of the referenced sections; however, the content of those referenced sections is Not stated in the document.

      Differences between the two provisions and practical impact

      • Starting date for notice-required returns (serial numbers 3 and 4): The enacted Section 423 (Act) uses "The last date of time allowed under such notice" as the starting date for serial numbers 3 and 4. The Clause 423 of Bill (Old Version) uses "Date immediately following the last date of time allowed under such notice" (for both serial numbers 3 and 4 in the Bill).
        • Practical impact: shifting the stated starting date by one day will change the counted months (T) in the formula I = 1% x A x T in some cases; whether the difference produces a material change depends on the method of counting months under the section (not further specified in the documents). It can lead to one additional month being counted in some interpretations, thereby increasing interest liability slightly in some cases.
      • Row 3 starting date wording: In the Act text, for serial number 3 the Starting date is "The last date of time allowed under such notice." The Bill text, for serial number 3, states "Date immediately following the last date of time allowed under such notice."
        • Practical impact: same as above; potential to alter the period used for interest computation.
      • Omissions/typographical differences affecting clarity: The Bill's Table entry for serial number 3 contains an apparent omission - "Where return of income is required by a notice u/s issued after..." (the section number is missing). The Act provides the relevant contextual references (Act shows section 280 in related contexts).
      • Practical impact: omission creates ambiguity in the Bill text about which notice provision is referred to; this could cause interpretive uncertainty unless corrected. The Act text does not exhibit that omission in the supplied extract.
      • "Tax paid" definition - tax credit cross-references: The Act's clause (4)(d)(vii) defines "tax paid" to include "any tax credit allowed to be set off as per sections 206(1)(m) to (p) and 206(2)(e) to (h)." The Bill (Old Version) substitutes "(vii) any tax credit allowed to be set off as per section 206(13)."
        • Practical impact: this is a substantive difference in cross-references. If the Bill's singular reference is intended to capture the same set of credits, the drafting does not make that clear. Depending on the actual content of section 206 in the statute (not stated in the document), taxpayers may lose (or gain) certain credits being treated as "tax paid" for interest computation. As the document supplied does not state the content of section 206, the practical effect cannot be fully determined from the text alone.
      • Form of notice of demand: Sub-section (3)(a) in the Act reads "in such form as may be prescribed"; the Bill reads "in the form as prescribed."
        • Practical impact: stylistic/minor drafting difference; both phrases point to prescribed form, but "such form as may be prescribed" is the more conventional legislative formulation. No clear substantive impact in isolation.
      • Other structural/wording differences: Minor variations in punctuation, paragraphing and referential phrases occur across the two texts (for example, use of "the Assessing Officer shall serve on the assessee a notice of demand in such form as may be prescribed specifying the sum payable" vs "shall serve on the assessee a notice of demand in the form as prescribed specifying the sum payable").
        • Practical impact: primarily drafting and clarity; no express substantive change beyond the items noted above based on the supplied texts.

      Practical Implications

      • Compliance and risk areas: The precise starting date language (whether the last date of time allowed or the day after that date) will affect calculation of months (T) - which could increase or decrease interest by the formula provided. Taxpayers filing in response to notices should be alert to how the start date is to be computed. Where the Bill's cross-references differ (notably to section 206), taxpayers should verify which tax credits count as "tax paid" for interest computations - the Bill text introduces uncertainty. The omission of a section number in serial number 3 may create avoidable disputes until corrected.
      • Record-keeping/evidence points: The text makes clear that dates of notices, dates of furnishing of returns, dates of completion of assessments and amounts of tax determined at various stages are determinative items. Parties should maintain contemporaneous records showing notice dates, time allowed under notices, dates of filing, assessments and any payments or credits claimed (details of records to be kept Not stated in the document).

      Key Takeaways

      • Clause 423 (Bill) applies a simple interest formula I = 1% x A x T for defaults in furnishing returns, tying the interest period to specific starting and ending events listed in a Table.
      • There are material drafting differences between the Bill and the enacted Section 423: notably in the exact stated starting dates for notice-driven cases and in the cross-references used to define tax credits included as "tax paid".
      • Shifts in starting date wording (last date vs date immediately following) can alter interest months counted and thus interest liability; the Bill language tends to state the day after, potentially increasing periods in some views.
      • The Bill text contains an omission (missing section reference in serial number 3 of the Table) creating interpretive ambiguity that requires correction or legislative clarification.
      • The Bill lists prescribed mechanisms for adjustment where post-assessment orders alter tax and requires notice of demand or refund accordingly.
      • The provision for reduction of interest by interest already paid u/s 266 and the detailed enumeration of items constituting "tax paid" show an intent to prevent double charging and to net prepayments and credits.

      Full Text:

      Section 423 Interest for defaults in furnishing return of income.

      Topics

      ActsIncome Tax