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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 interest on default in payment of advance tax, the 'assessed tax' is computed as the tax on the total income declared in the return, reduced by which of the following?

Assessed tax is the tax on declared total income less TDS or TCS on income included in it, plus specified reliefs and tax credits. Advance tax is not deducted, because it is compared with assessed tax to find the shortfall.

  1. AAdvance tax paid and self-assessment tax paid
  2. BTax deducted or collected at source on income taken into total income, along with specified reliefs and tax creditsCorrect
  3. COnly the relief for foreign tax paid
  4. DInterest paid under the Act on earlier defaults

Explanation

Section 266(6) reduces the tax on declared total income by TDS or TCS on income included in total income, relief under section 157, foreign tax relief or deduction, and specified tax credits. Advance tax is not deducted in arriving at assessed tax; it is compared against it to find the shortfall.

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