Default in payment of advance tax (Under Section 234B)
section 234 B says
You need to pay at least 90% of your total assessed tax before 31st March to avoid interest. No interest is applicable if the outstanding tax amount is less than 10% of the total tax liability for the financial year.
Does the total "assessed tax" include the educational cess (3%) as well?
In my case, if educational cess is included, then I have to pay the interest for default in payment for advance tax (Under Section 234B). If educational cess is not included in the total assessed tax, then I have paid more than 90% by 31st Mar and hence need not pay this interest under section 234B.
Thanks in advance
Asked 1 year ago in Income Tax from Chennai, Tamil Nadu
It makes no difference.
Lets suppose you paid Rs. 90 as Advance Tax. The cess thereon @ 3% works out to Rs. 2.7. The total advance tax paid by you is Rs. 92.7.
Now the tax is Rs. 100. The cess thereon @ 3% works out to Rs. 3/-. The total tax payable by you is Rs. 103.
Now if you check calculations,Rs. 92.7 is also 90% of Rs. 103/-.
What you are perhaps trying to do is that Rs. 90 includes cess. The assessed tax is Rs103, in which case the advance tax payment will be less than 90% of assessed tax. However, this computation is not correct. You cannot compare oranges with apples.
Talk to B Vijaya Kumar
5.0 on 5.0
yes it includes the education cess as well.
Talk to Shyam Sunder Modani
4.7 on 5.0
The word tax includes basic tax as well as cess.
CA Rohit R Sharma.
Talk to Rohit R Sharma
5.0 on 5.0
The assessed tax includes educational cess, better you pay interest u/s 234B.
Talk to Vijay N. Kale
4.9 on 5.0