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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, if an assessee fails to pay the whole or part of the tax, interest or fee required to be paid with the return, what is the consequence?

Failing to pay the tax, interest or fee due with the return makes the assessee a deemed assessee in default for the unpaid amount, and the Act's provisions apply accordingly. This is without prejudice to other consequences the assessee may face.

  1. AThe return is automatically treated as non-est
  2. BThe assessee is deemed to be an assessee in default for the unpaid amountCorrect
  3. CThe assessee is exempt if the tax is under Rs 10,000
  4. DOnly a fine is levied, with no recovery action

Explanation

Section 266(8) deems the assessee to be in default for the unpaid tax, interest or fee, and the Act's provisions apply accordingly. Section 266(9) adds that this is without prejudice to other consequences. The Act does not make the return non-est on this ground.

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