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CS Executive · Tax Laws and Practice · Procedural Compliance under Income Tax

Under the Income-tax Act, 2025, an assessee's tax due on returned income is ₹1,00,000 and he paid no advance tax by 15 June, 15 September or 15 December. He paid the full ₹1,00,000 by 15 March. Which interest total is correct on the instalment shortfalls, assuming no exception applies and interest is taken as the rate in the Table on the shortfall, ignoring the time-period factor?

Interest is ₹4,050. The shortfalls for the June, September and December instalments are ₹15,000, ₹45,000 and ₹75,000, each charged at 3%, giving ₹450, ₹1,350 and ₹2,250. Nothing is charged for March because the full tax was paid by 15 March.

  1. A₹15,000×3% + ₹45,000×3% + ₹75,000×3% + nil for March = ₹4,050Correct
  2. B₹15,000×3% + ₹45,000×3% + ₹75,000×3% + ₹1,00,000×1% = ₹4,050
  3. C₹1,00,000×3% = ₹3,000
  4. D₹15,000×1% + ₹45,000×1% + ₹75,000×1% = ₹1,350

Explanation

Shortfalls are 15%, 45% and 75% of ₹1,00,000, i.e. ₹15,000, ₹45,000, ₹75,000, each at 3%: 450+1,350+2,250 = ₹4,050. The 15 March instalment is paid in full by 15 March, so no shortfall exists there. The second option wrongly adds 1% on ₹1,00,000.

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