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CS Professional · Advanced Direct Tax Laws and Practice · Computation of Total Income, Tax Liability and Filing of Return of Companies

Under the Income-tax Act, 2025, for computing interest for default in payment of advance tax, what is 'assessed tax' as defined in section 266(6)?

Assessed tax is the tax on the total income declared in the return, reduced by TDS or TCS on income included in that total income, relief under section 157, foreign tax reliefs and specified tax credits. Advance tax is not deducted in this definition.

  1. ATax on the total income declared in the return, reduced by TDS/TCS on income included in total income and the specified reliefs and creditsCorrect
  2. BTax on the total income declared in the return, reduced by advance tax already paid
  3. CTax determined on regular assessment, without any reduction
  4. DTax on the total income declared, reduced only by self-assessment tax paid

Explanation

Section 266(6) defines assessed tax as tax on declared total income reduced by TDS/TCS on income taken into account, foreign tax reliefs, relief under section 157 and specified tax credits. Advance tax is not deducted in this definition; the shortfall of advance tax is measured against it.

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