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ITA Chapter 19 P2

Computation of advance tax

  1. The amount of advance tax payable by an assessee under section 404, on his own accord under section 406, or in pursuance of an order of an Assessing Officer under section 407, in the financial year shall, subject to the provisions of sub-section (2), be computed as under—
    1. A = B − C
    2. where—
      1. A = the amount of advance tax payable in a financial year;
      2. B = income-tax on the specified sum calculated at the rates in force in the financial year, where “specified sum” shall have the meaning assigned to it in section 406 or 407;
      3. C = amount of income-tax which would be deductible or collectible at source during the said financial year under any provision of this Act from any income subject to the following—
        1. such income is computed before allowing any deduction admissible under this Act and has been taken into account in computing the specified sum; and
          1. the person responsible for deducting tax has paid or credited such income after deduction of tax; or
          2. the person responsible for collecting tax has received or debited such income after collection of tax.
  2. In the case of any class of assessees, where the Finance Act of the relevant year provides that, net agricultural income shall be taken into account for the purposes of computing advance tax, then—
    1. for the purposes of order as mentioned in section 407(1) and (4), the net agricultural income shall be the amount that has been taken into account for the purposes of charging income-tax on the specified sum as mentioned in sub-sections (3) and (6) of the said section; or
    2. in any other situation, the net agricultural income as estimated by the assessee for the tax year.

Payment of advance tax by assessee on his own accord

  1. Every person, who is liable to pay advance tax under section 404 (whether or not he has been previously assessed by way of regular assessment) shall, on his own accord, pay advance tax on the specified sum, calculated in the manner laid down in section 405, at the appropriate percentage, on or before the due date of each instalment, as specified in section 408.
  2. A person who pays any instalment or instalments of advance tax under sub-section (1), may increase or reduce the amount of advance tax payable in the remaining instalment or instalments to accord with specified sum and the advance tax payable thereon, and make payment of the said tax in the remaining instalment or instalments accordingly.
  3. For the purposes of this section, the expression “specified sum” means current income as estimated by the assessee.

Payment of advance tax by assessee in pursuance of order of Assessing Officer

  1. Where a person has already been assessed for the total income of any tax year by way of regular assessment and the Assessing Officer is of the opinion that such person is liable to pay advance tax, he may require such person to pay advance tax on the specified sum, calculated in the manner laid down in section 405, by an order in writing, specifying the instalment or instalments in which such tax is to be paid, on or before the due date of each instalment specified in section 408.
  2. The order referred to in sub-section (1) may be passed at any time during the financial year but not later than the last day of February of such financial year and it shall be followed by issuance of notice of demand under section 289.
  3. In sub-section (1), “specified sum” means a sum, being higher of—
    1. the total income of the latest tax year in respect of which the assessee has been assessed by way of regular assessment; or
    2. total income returned by the assessee in any return of income furnished by him for any subsequent tax year.
  4. If after making of an order by the Assessing Officer under sub-section (1)—
    1. a return of income is furnished by the assessee, under section 263 or in response to a notice under section 268; or
    2. a regular assessment of the income is made in respect of a tax year, later than the assessment referred to in sub-section (1),
    the Assessing Officer may amend the order referred to in sub-section (1), and may require such assessee to pay advance tax on the specified sum, calculated in the manner laid down in section 405, on or before the due date of each instalment specified in section 408.
  5. The order referred to in sub-section (4) may be passed at any time before the 1st March of that tax year and it shall be followed by issuance of a demand notice under section 289.
  6. In sub-section (4), “specified sum” means the total income declared in the return of income or computed in regular assessment mentioned in sub-section (4)(a) and (b), respectively.
  7. If the notice of demand issued under section 289, as referred in sub-sections (2) and (5), is served after any of the due dates specified in section 408, the appropriate part or, the whole of the amount of the advance tax specified in such notice, shall be payable on or before each of the due date falling after the date of service of the notice of demand.
  8. Where a person, who is served with an order referred to in sub-section (1) or (4), estimates the advance tax payable on his current income to be lower than the amount of advance tax specified in the said order, then, he may send an intimation in the prescribed form to the Assessing Officer to that effect, and pay such advance tax on the current income, calculated in the manner laid down in section 405 as accords with his estimate, at an appropriate percentage thereof on or before the due date of each instalment specified in section 408 falling after the date of such intimation.
  9. Where a person, who is served with an order referred to in sub-section (1) or (4), estimates that advance tax payable on his current income would exceed the amount of advance tax specified in such order or intimated by him under sub-section (8), he shall pay such advance tax on the current income, calculated in the manner laid down in section 405 at the appropriate part or whole of such higher amount of advance tax as accords with his estimate, on or before the due date of the last instalment specified in section 408.

Instalments of advance tax and due dates

  1. All the assessees who are liable to pay advance tax, other than the assessee referred to in sub-section (2), shall pay the same on the current income calculated in the manner laid down in section 405 in four instalments during each financial year and the due date of each instalment and the amount of such instalment shall be as specified in the Table below:
  2. An assessee, who declares profits and gains as per the provisions of section 58(2) (Table: Sl. No. 1 or 3), shall pay the whole amount of advance tax on the current income, calculated in the manner laid down in section 405 during each financial year, on or before the 15th March.
  3. Any amount paid by way of advance tax on or before the 31st March, shall be treated as advance tax paid during the financial year ending on that day for all the purposes of this Act.

When assessee is deemed to be in default

  1. A person shall be deemed to be an assessee in default, if such person—
    1. does not pay on the date specified in section 408, any instalment of the advance tax that he is required to pay by an order of the Assessing Officer under section 407(1) and (4); or
    2. does not send to the Assessing Officer an intimation under section 407(8) on or before the date on which any such instalment as is not paid becomes due; or
    3. does not pay on the basis of his estimate of his current income, the advance tax payable by him under section 407(9),
    in respect of such instalment or instalments.

Credit for advance tax

  1. Any sum, other than a penalty or interest, paid by or recovered from an assessee as advance tax in pursuance of this Part shall be treated as a payment of tax in respect of the income of the tax year in which it was payable, and credit therefor shall be given to such assessee in the regular assessment

When tax payable and when assessee deemed in default

  1. Any amount, otherwise than by way of advance tax, specified as payable in a notice of demand under section 289 at the place and to the person mentioned in the notice shall be paid within—
    1. thirty days of the service of the notice; or
    2. such period being a period less than thirty days, as specified in the notice with the previous approval of the Joint Commissioner, where the Assessing Officer has any reason to believe that it shall be detrimental to revenue if the full period of thirty days is allowed.
  2. Where any notice of demand has been served upon an assessee and any appeal or other proceeding, as the case may be, is filed or initiated in respect of the amount specified in the said notice of demand, then—
    1. such demand shall be deemed to be valid till the disposal of the appeal by the last appellate authority or disposal of the proceedings; and
    2. any such notice of demand shall have the effect as specified in section 3 of the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964 (11 of 1964).
  3. If the amount specified in any notice of demand under section 289 is not paid within the period specified under sub-section (1),—
    1. the assessee shall be liable to pay simple interest at 1% for every month or part of a month comprised in the period; and
    2. such period shall commence from the day immediately following the end of the period mentioned in sub-section (1) and end with the day on which the amount is paid.
    No interest shall be charged under this sub-section in respect of any demand raised on account of penalty levied under section 439,—
    1. up to the date of passing of the order under section 359;
    2. up to the date of passing of the order under section 363, where the assessment or reassessment has been made in pursuance to directions issued by the Dispute Resolution Panel under section 275.
  4. No interest shall be charged under sub-section (3) on any amount for any period, where interest is charged on the same amount for the same period under section 398(3) on the amount of tax specified in the intimation issued under section 399.
  5. Nothing contained in sub-section (3) shall prevent the Assessing Officer, where an application is made by the assessee before the expiry of the due date under sub-section (1), to extend the time for payment or allow payment by instalments, subject to such conditions as he may think fit to impose in the circumstances of the case.
  6. Where as a result of an order under section 287 or 288 or 359 or 363 or 365(10) or 368 or 378 or an order of the Settlement Commission under section 245D(4) of the Income-tax Act, 1961 (43 of 1961),—
    1. the amount on which interest was payable under sub-section (3) had been reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded; and
    2. if subsequent to such reduction, as a result of an order under said sections or section 377, the amount on which interest was payable is increased, the assessee shall be liable to pay interest under sub-section (3),—
      1. from the day immediately following the end of the period mentioned in the first notice of demand, referred to in sub-section (1); and
      2. ending with the day on which the amount is paid.
  7. Irrespective of the provisions contained in sub-section (3), the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may, on an application by the assessee, reduce or waive the amount of interest paid or payable by an assessee under sub-section (3) if he is satisfied that—
    1. payment of such amount has caused or would cause genuine hardship to the assessee;
    2. default in the payment of the amount on which interest has been paid or was payable under the said sub-section was due to circumstances beyond the control of the assessee; and
    3. the assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him.
  8. The order under sub-section (7) accepting or rejecting the application of the assessee, either in full or in part, shall be passed within twelve months from the end of the month in which the application is received.
  9. No order under sub-section (7) rejecting the application, either in full or in part, shall be passed unless the assessee has been given an opportunity of being heard.
  10. If the amount is not paid within the specified time under sub-section (1) or extended under sub-section (5), at the place and to the person mentioned in the said notice, the assessee shall be deemed to be in default.
  11. If, in a case where payment by instalments is allowed under sub-section (5), the assessee commits defaults in paying any one of the instalments within the time fixed under that sub-section,—
    1. the assessee shall be deemed to be in default as to the whole of the amount then outstanding; and
    2. the other instalment or instalments shall be deemed to have been due on the same date as the instalment actually in default.
  12. Where an assessee has presented an appeal under section 356 or 357, the Assessing Officer may, in his discretion and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired, till the time such appeal remains undisposed of.
  13. Where an assessee has been assessed in respect of income arising outside India in a country, the laws of which prohibit or restrict the remittance of money to India, the Assessing Officer shall—
    1. not treat the assessee as in default in respect of that part of the tax which is due in respect of that amount of his income which, by reason of such prohibition or restriction, cannot be brought into India; and
    2. continue to treat the assessee as not in default in respect of such part of the tax until the prohibition or restriction is removed.
  14. For the purposes of sub-section (13), income shall be deemed to have been brought into India, if—
    1. it has been utilised or could have been utilised for the purposes of any expenditure actually incurred by the assessee outside India; or
    2. the income, whether capitalised or not, has been brought into India in any form.

Penalty payable when tax in default

  1. When an assessee is in default or is deemed to be in default in making a payment of tax, he shall, in addition to the amount of the arrears and the amount of interest payable under section 411(3), be liable, by way of penalty, to pay—
    1. such amount as the Assessing Officer may direct; and
    2. in the case of a continuing default, such further amount or amounts as the Assessing Officer may, from time to time, direct.
  2. The total amount of penalty under sub-section (1) shall not exceed the amount of tax in arrears.
  3. No penalty under sub-section (1) shall be levied—
    1. unless the assessee has been given a reasonable opportunity of being heard;
    2. where the assessee proves to the satisfaction of the Assessing Officer that the default was for good and sufficient reasons.
  4. The assessee shall not cease to be liable to any penalty under sub-section (1) merely by reason of the fact that before the levy of such penalty he has paid the tax.
  5. Where as a result of any final order the amount of tax, with respect to the default in the payment of which the penalty was levied, has been wholly reduced, the penalty levied shall be cancelled and the amount of penalty paid shall be refunded.

Certificate by Tax Recovery Officer and validity thereof

  1. When an assessee is in default or is deemed to be in default in making a payment of tax, the Tax Recovery Officer may draw up under his signature a statement in such form as may be prescribed specifying the amount of arrears due from the assessee (such statement being herein and in sections 414 to 416 referred to as certificate) and shall proceed to recover from such assessee the amount specified in the certificate by one or more of the modes mentioned below, as per the rules prescribed in this regard—
    1. attachment and sale of movable property of the assessee;
    2. attachment and sale of immovable property of the assessee;
    3. appointing a receiver for the management of movable and immovable properties of the assessee.
  2. The Tax Recovery Officer may take action under sub-section (1), whether or not proceedings for recovery of the arrears by any other mode have been taken.
  3. The assessee shall not be entitled to dispute the correctness of any certificate drawn up by the Tax Recovery Officer on any ground.
  4. The Tax Recovery Officer may cancel the certificate if, for any reason, he considers it necessary so to do, or may correct any clerical or arithmetical mistake therein.
  5. For the purposes of this section, the movable or immovable property of the assessee shall include any property—
    1. which has been transferred, directly or indirectly on or after the 1st June, 1973, by the assessee to his spouse or minor child or son’s wife or son’s minor child, otherwise than for adequate consideration, and which is held by, or stands in the name of, any of the said persons; and
    2. so far as the movable or immovable property so transferred to his minor child or his son’s minor child is concerned, it shall, even after the date of attainment of majority by such minor child or son’s minor child, as the case may be, continue to be included in the movable or immovable property of the assessee for recovering any arrears due from the assessee in respect of any period prior to such date.

Tax Recovery Officer by whom recovery is to be effected

  1. For the purposes of section 413, the Tax Recovery Officer shall be—
    1. the Tax Recovery Officer within whose jurisdiction the assessee carries on his business or profession or has the principal place of his business or profession; or
    2. the Tax Recovery Officer within whose jurisdiction the assessee resides or any of his movable or immovable property is situated,
    the jurisdiction for this purpose being the jurisdiction assigned to the Tax Recovery Officer under the orders or directions issued by the Board, or by any income-tax authority not below the rank of Commissioner who is authorised in this behalf by the Board in pursuance of section 241.
  2. Where an assessee has property within the jurisdiction of more than one Tax Recovery Officer and the Tax Recovery Officer by whom the certificate is drawn up—
    1. is not able to recover the entire amount by sale of the property, movable or immovable, within his jurisdiction; or
    2. is of the opinion that, for the purpose of expediting or securing the recovery of the whole or any part of the amount under this Part, it is necessary so to do,
    he may send—
    1. the certificate; or
    2. a copy of the certificate certified in the manner as may be prescribed and specifying the amount to be recovered, where only a part of the amount is to be recovered,
    to a Tax Recovery Officer referred to in sub-section (1)(b) and, thereupon, such officer shall also proceed to recover the amount under this Part as if the certificate or copy thereof had been drawn up by him.

Stay of proceedings in pursuance of certificate and amendment or cancella- tion thereof

  1. The Tax Recovery Officer may grant time for the payment of any tax and, till the expiry of such time, shall stay the recovery proceedings for such tax.
  2. Where a certificate has been drawn up and subsequently, the amount of the outstanding demand is reduced as a result of the order giving rise to the said demand, being modified in an appeal or other proceeding under this Act, the Tax Recovery Officer shall—
    1. if the order is the subject-matter of further proceeding under this Act, stay the recovery of such part of the amount specified in the certificate as pertains to the said reduction for the period for which the appeal or other proceeding remains pending; or
    2. if the order which was the subject-matter of such appeal or other proceeding has become final and conclusive, amend the certificate, or cancel it.

Other modes of recovery

  1. Where no certificate has been drawn up under section 413, the Assessing Officer may recover the tax by any one or more of the modes provided in this section.
  2. Where a certificate has been drawn up under section 413, the Tax Recovery Officer may, without prejudice to the modes of recovery specified in that section, recover the tax by any one or more of the modes provided in this section.
  3. If any assessee is in receipt of any income chargeable under the head “Salaries”, the Assessing Officer or Tax Recovery Officer may require any person paying the same to deduct from any payment subsequent to the date of such requisition any arrears of tax due from such assessee and such person shall comply with the said requisition and shall pay the sum so deducted to the credit of the Central Government or as the Board directs.
  4. Nothing contained in sub-section (3) shall apply to any part of the salary exempted from attachment in execution of a decree of a civil court under section 60 of the Code of Civil Procedure, 1908 (5 of 1908).
  5. The Assessing Officer or Tax Recovery Officer may, at any time or from time to time, by notice in writing require any person—
    1. from whom money is due or may become due to the assessee; or
    2. who holds or may subsequently hold money for or on account of the assessee,
    to pay to the Assessing Officer or Tax Recovery Officer—
    1. either forthwith upon the money becoming due or being held; or
    2. at or within the time specified in the notice (not being before the money becomes due or is held),
    so much of the money as is sufficient to pay the amount due by the assessee in respect of arrears or the whole of the money when it is equal to or less than that amount.
    1. A notice under this sub-section may be issued to any person who holds or may subsequently hold any money for or on account of the assessee jointly with any other person.
    2. For the purposes of this sub-section, the shares of the joint holders in the account, as referred in clause (b), shall be presumed, until the contrary is proved, to be equal.
    3. A copy of the notice under this sub-section shall be forwarded to—
      1. the assessee; and
      2. in the case of a joint account to all the joint holders,
      at his or their last addresses known to the Assessing Officer or Tax Recovery Officer.
    4. Save as otherwise provided in this sub-section, every person to whom a notice is issued under that sub-section shall be bound to comply with such notice.
    5. Any claim respecting any property in relation to which a notice under this sub-section has been issued arising after the date of the notice shall be void as against any demand contained in the notice.
    6. Where a person, to whom a notice under this sub-section is issued, objects to it by a statement on oath that—
      1. the sum demanded or any part thereof is not due to the assessee; or
      2. he does not hold any money for or on account of the assessee,
      then nothing contained in that sub-section shall be deemed to require such person to pay any such sum or part thereof.
    7. Where it is discovered that the statement given by a person under clause (g) was false in any material particular, such person shall be personally liable to the Assessing Officer or Tax Recovery Officer to the extent of his own liability to the assessee on the date of the notice, or to the extent of the assessee’s liability for any sum due under this Act, whichever is less.
    8. The Assessing Officer or Tax Recovery Officer may, at any time or from time to time, amend or revoke any notice issued under this sub-section or extend the time for making any payment in pursuance of a notice issued under the said sub-section.
    9. The Assessing Officer or Tax Recovery Officer shall grant a receipt for any amount paid in compliance with a notice issued under this sub-section, and the person so paying shall be fully discharged from his liability to the assessee to the extent of the amount so paid.
    10. Any person discharging any liability to the assessee after receipt of a notice under this sub-section shall be personally liable to the Assessing Officer or the Tax Recovery Officer—
      1. to the extent of his own liability to the assessee so discharged; or
      2. to the extent of the assessee’s liability for any sum due under this Act, whichever is less.
    11. If the person to whom a notice under this sub-section is issued fails to make payment in pursuance thereof to the Assessing Officer or Tax Recovery Officer—
      1. he shall be deemed to be an assessee in default in respect of the amount specified in the notice and further proceedings may be taken against him for the realisation of the amount as if it were an arrear of tax due from him, in the manner provided in sections 413 to 415; and
      2. the notice shall have the same effect as an attachment of a debt by the Tax Recovery Officer in exercise of his powers under section 413.
  6. The Assessing Officer or Tax Recovery Officer may apply to the court in whose custody there is money belonging to the assessee—
    1. for payment to him of the entire amount of such money; or
    2. if it is more than the tax due, an amount sufficient to discharge the tax.
  7. The Assessing Officer or Tax Recovery Officer may, if so authorised by an income-tax authority not below the rank of Commissioner by general or special order, recover any arrears of tax due from an assessee by distraint and sale of his movable property in the manner as may be prescribed.

Recovery through State Government

  1. If the recovery of tax in any area has been entrusted to a State Government under article 258(1) of the Constitution, the State Government may direct, with respect to that area or any part thereof that tax shall be recovered therein with, and as an addition to, any municipal tax or local rate, by the same person and in the same manner as the municipal tax or local rate is recovered

Recovery of tax in pursuance of agreements with foreign countries

  1. Where an agreement is entered into by the Central Government with the Government of any country outside India for recovery of income-tax under this Act and the corresponding law in force in that country and the Government of that country or any authority under that Government which is specified in this behalf in such agreement sends to the Board a certificate for the recovery of any tax due under such corresponding law from—
    1. a resident; or
    2. a person having any property in India,
    the Board may forward such certificate to any Tax Recovery Officer having jurisdiction over the resident, or within whose jurisdiction such property is situated and thereupon such Tax Recovery Officer shall—
    1. proceed to recover the amount specified in the certificate in the manner in which he would proceed to recover the amount specified in a certificate drawn up by him under section 413; and
    2. remit any sum so recovered by him to the Board after deducting his expenses in connection with the recovery proceedings.
  2. Where an assessee who is in default or is deemed to be in default in making a payment of tax—
    1. is a resident of a country being a country with which the Central Government has entered into an agreement for the recovery of income-tax under this Act and the corresponding law in force in that country; or
    2. has any property in the country referred to in clause (a),
    then, Tax Recovery Officer may forward to the Board a certificate drawn up by him under section 413 and the Board may take such action thereon as it may deem appropriate having regard to the terms of the agreement with such country.

Recovery of penalties, fine, interest and other sums

  1. Any sum imposed by way of interest, fine, penalty, or any other sum payable under the provisions of this Act, shall be recoverable in the manner provided in this Part for the recovery of arrears of tax

Tax clearance certificate

  1. Subject to such exceptions as the Central Government may, by notification, specify in this behalf, no person—
    1. who is not domiciled in India;
    2. who has come to India in connection with business, profession or employment; and
    3. who has income derived from any source in India,
    shall leave the territory of India by land, sea or air unless he furnishes to such authority as may be prescribed—
    1. an undertaking in the prescribed form from his employer; or
    2. through whom such person is in receipt of the income,
    to the effect that tax payable by such person who is not domiciled in India shall be paid by the employer referred to in clause (i) or the person referred to in clause (ii), and the prescribed authority shall, on receipt of the undertaking, immediately give to such person a no objection certificate, for leaving India.
  2. Nothing contained in sub-section (1) shall apply to a person who is not domiciled in India but visits India as a foreign tourist or for any other purpose not connected with business, profession or employment.
  3. Subject to such exceptions as the Central Government may, by notification, specify in this behalf, every person, who is domiciled in India at the time of his departure from India, shall furnish—
    1. the Permanent Account Number allotted to him under section 262;
    2. the purpose of his visit outside India; and
    3. the estimated period of his stay outside India,
    to the income-tax authority or such other authority in such form, as may be prescribed.
  4. Where no such Permanent Account Number has been allotted to any person referred to in sub-section (3), or his total income is not chargeable to income-tax, or he is not required to obtain a Permanent Account Number under this Act, such person shall furnish a certificate in such form, as may be prescribed.
  5. No person—
    1. who is domiciled in India at the time of his departure; and
    2. in respect of whom circumstances exist which, in the opinion of an income-tax authority render it necessary for such person to obtain a certificate under this section,
    shall leave the territory of India by land, sea or air unless he obtains a certificate from the income-tax authority stating that he has no liability under this Act or the Wealth-tax Act, 1957 (27 of 1957) or the Gift-tax Act, 1958 (18 of 1958) or the Income-tax Act, 1961 (43 of 1961) or the Expenditure-tax Act, 1987 (35 of 1987) or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015), or that satisfactory arrangements have been made for the payment of all or any of such taxes which are or may become payable by that person.
  6. No income-tax authority shall make it necessary for any person who is domiciled in India to obtain a certificate under this section unless—
    1. he records the reasons therefor; and
    2. obtains the prior approval of Principal Chief Commissioner or Chief Commissioner.
  7. If the owner or charterer of any ship or aircraft carrying persons from any place in the territory of India to any place outside India allows any person to whom sub-section (1) or (5) applies to travel by such ship or aircraft without first satisfying himself that such person is in possession of a certificate as required by that sub-section, he shall be personally liable to pay the whole or any part of the amount of tax, if any, payable by such person as the Assessing Officer may, having regard to the circumstances of the case, determine.
  8. In respect of any sum payable by the owner or charterer of any ship or aircraft under sub-section (7)—
    1. the owner or charterer shall be deemed to be an assessee in default for such sum; and
    2. such sum shall be recoverable from him in the manner provided in this Part as if it were an arrear of tax.
  9. The Board may make rules for regulating any matter necessary for, or incidental to, the purpose of carrying out the provisions of this section.
  10. For the purposes of this section, the expressions “owner” and “charterer” include any representative, agent or employee empowered by the owner or charterer to allow persons to travel by the ship or aircraft.

Recovery by suit or under other law not affected

  1. The several modes of recovery specified in this Part shall not affect in any way—
    1. any other law for the time being in force relating to the recovery of debts due to Government; or
    2. the right of the Government to institute a suit for the recovery of the arrears due from the assessee,
    and it shall be lawful for the Assessing Officer or the Government, as the case may be, to have recourse to any such law or suit, irrespective of the fact that the tax due is being recovered from the assessee by any mode specified in this Part of the Chapter.

Recovery of tax arrear in respect of non-resident from his assets

  1. Irrespective of anything contained in section 304(1) or (5), where the person entitled to the income referred to in section 9(2) is a non-resident, the tax chargeable thereon, whether in his name or in the name of his agent who is liable as a representative assessee—
    1. may be recovered by deduction under the provisions of Chapter XIX-B; and
    2. any arrears of tax may also be recovered as per the provisions of this Act from any assets of the non-resident which are, or may at any time come, within India.

Interest for defaults in furnishing return of income

  1. Where the return of income for any tax year is furnished after the due date or is not furnished, the assessee shall be liable to pay simple interest as per the following formula:—

    I = 1% × A × T

    where—
    1. I = the interest payable;
    2. A = the amount of tax on which interest is payable, as specified in sub-section (2);
    3. T = number of months comprised in the period commencing on the date immediately following the starting date and ending on the end date, both specified in sub-section (2).
  2. For sub-section (1), in respect of the circumstances specified in column B of the Table below, the starting date shall be the date specified in column C, the ending date shall be the date as specified in column D and the amount of tax on which interest is payable is specified in column E.
  3. Where as a result of an order under section 287 or 288 or 359 or 363 or 365(10) or 368 or 377 or 378, the amount of tax on which interest was payable under sub-sections (1) and (2) has been increased or reduced, the interest shall be increased or reduced accordingly, and in a case—
    1. where the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in such form as may be prescribed specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 289 and the provisions of this Act shall apply accordingly;
    2. where the interest is reduced, the excess interest paid, if any, shall be refunded.
  4. For the purposes of this section—
    1. tax on total income as determined under section 270(1) shall not include the additional income-tax, if any, payable under section 267;
    2. tax on the total income determined under regular assessment shall not include the additional income-tax payable under section 267;
    3. interest payable under sub-section (1) shall be reduced by the interest, if any, paid under section 266 towards the interest chargeable;
    4. “tax paid” means—
      1. advance tax, if any, paid;
      2. any tax deducted or collected at source;
      3. any relief of tax allowed under section 157;
      4. any relief of tax allowed under section 159(1) on account of tax paid in a country outside India;
      5. any relief of tax allowed under section 159(2) on account of tax paid in a specified territory outside India referred to in that section;
      6. any deduction, from the Indian income-tax payable, allowed under section 160, on account of tax paid in a country outside India; and
      7. any tax credit allowed to be set off as per section 206(2)(e) to (h) and 206(3) and (4).
  5. Where for any tax year, an assessment is made for the first time under section 279, the assessment so made shall be regarded as a regular assessment for the purposes of this section.

Interest for defaults in payment of advance tax

  1. Subject to the other provisions of this section, where, in any tax year, an assessee who is liable to pay advance tax under section 404—
    1. has failed to pay such tax; or
    2. the advance tax paid by such assessee under the provisions of section 406 or 407 is less than 90% of the assessed tax,
    the assessee shall be liable to pay simple interest at the rate of 1% for every month or part of a month, for the period, beginning from the 1st April following such tax year—
    1. up to the date of determination of total income under section 270(1); and
    2. up to the date of completion of regular assessment, where a regular assessment is made,
    on an amount equal to the assessed tax in case where clause (a) is applicable or, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax in case where clause (b) is applicable.
  2. In sub-section (1), “assessed tax” means the tax on the total income determined under section 270(1) and where a regular assessment is made, the tax on the total income determined under such regular assessment as reduced by the amount of—
    1. any tax deducted or collected at source as per Chapter XIX-B on any income which is subject to such deduction or collection and which is taken into account in computing such total income;
    2. any relief of tax allowed under section 157;
    3. any relief of tax allowed under section 159(1) on account of tax paid in a country outside India;
    4. any relief of tax allowed under section 159(2) on account of tax paid in a specified territory outside India referred to in that section;
    5. any deduction, from the Indian income-tax payable, allowed under section 160, on account of tax paid in a country outside India; and
    6. any tax credit allowed to be set off as per section 206(2)(e) to (h) and 206(3) and (4).
  3. For the purposes of this section—
    1. where in relation to a tax year, an assessment is made for the first time under section 279, the assessment so made shall be regarded as a regular assessment;
    2. tax on total income as determined under section 270(1) shall not include the additional income-tax, if any, payable under section 267;
    3. tax on the total income determined under such regular assessment shall not include the additional income-tax payable under section 267.
  4. Where, before the date of determination of total income under section 270(1) or completion of a regular assessment, tax is paid by the assessee under section 266 or otherwise—
    1. interest shall be calculated as per the foregoing provisions of this section up to the date on which the tax is so paid, and reduced by the interest, if any, paid under section 266 towards the interest chargeable under this section;
    2. thereafter, interest shall be calculated at the rate aforesaid on the amount by which the tax so paid together with the advance tax paid falls short of the assessed tax.
  5. Where as a result of an order of reassessment or recomputation under section 279, the amount on which interest was payable in respect of shortfall in payment of advance tax for any tax year under sub-section (1) is increased, the assessee shall be liable to pay simple interest at the rate of 1% for every month or part of a month comprised in the period commencing on the 1st April immediately following such tax year and ending on the date of the reassessment or recomputation on such amount determined as per formula below:—

    A = B – C

    where—
    1. A = the increased amount on which interest was payable in respect of shortfall in payment of advance tax for any tax year as a result of reassessment or recomputation;
    2. B = tax on total income determined on the basis of reassessment or recomputation;
    3. C = tax on total income determined under section 270(1) or regular assessment as referred to in sub-section (1).
  6. Where, as a result of an order under section 287 or 288 or 359 or 363 or 365(10) or 368 or 377 or 378, the amount on which interest was payable under sub-section (1) or (3) has been increased or reduced, the interest shall be increased or reduced accordingly, and—
    1. in a case where the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in such form as may be prescribed specifying the sum payable and such notice of demand shall be deemed to be a notice under section 289 and the provisions of this Act shall apply accordingly;
    2. in a case where the interest is reduced, the excess interest paid, if any, shall be refunded.

Interest for deferment of advance tax

  1. Where in any tax year, an assessee, liable to pay advance tax under section 404, other than the assessee mentioned in sub-section (3), has failed to pay such tax, or the advance tax paid by the assessee on its current income on or before the date specified in column B of the Table below, is less than advance tax due on returned income, as specified in column C, then the assessee shall be liable to pay interest on the amount of shortfall of advance tax as specified in column D, at the rate of interest specified in column E.
  2. The assessee shall not be liable to pay any interest under sub-section (1), if the advance tax paid by the assessee on the current income—
    1. on or before the 15th day of June is 12% or more of the tax due on the returned income;
    2. on or before the 15th day of September is 36% or more of the tax due on the returned income.
  3. An assessee who declares profits and gains as per section 58(2) (Table: Sl. No. 1 or 3) or, who is liable to pay advance tax under section 404, has failed to pay such tax, or the advance tax paid by the assessee on its current income on or before the 15th day of March is less than the tax due on returned income, shall be liable to pay simple interest at the rate of 1% on the amount of shortfall from the tax due on returned income.
  4. No interest shall be payable under sub-section (1) or (3) in respect of shortfall in the payment of tax due on returned income, where—
    1. the shortfall is on account of under estimation of, or failure to estimate the following income—
      1. capital gains;
      2. income as per section 2(49)(n);
      3. income under the head profits and gains of business or profession accruing or arising for the first time;
      4. dividend income; and
    2. the assessee has paid in full, the tax payable on the said income had such income been part of total income, in any of the remaining instalments of advance tax, if any, or by the 31st day of March of the tax year.
  5. For the purposes of this section “tax due on the returned income” means the tax chargeable on the total income declared in the return of income furnished by the assessee for the tax year in which the advance tax is paid or payable, as reduced by the amount of—
    1. any tax deducted or collected at source as per the provisions of Chapter XIX-B on any income which is subject to such deduction or collection and which is taken into account in computing such total income;
    2. any relief of tax allowed under section 157;
    3. any relief of tax allowed under section 159(1) on account of tax paid in a country outside India;
    4. any relief of tax allowed under section 159(2) on account of tax paid in a specified territory outside India referred to in that section;
    5. any deduction, from the Indian income-tax payable, allowed under section 160, on account of tax paid in a country outside India; and
    6. any tax credit allowed to be set off as per section 206(2)(e) to (h) and 206(3) and (4).
  6. For the purposes of this sub-section, the expression “dividend” shall have the meaning assigned to it in section 2(40), but shall not include sub-clause (e) thereof.

Interest on excess refund

  1. Subject to the other provisions of this Act, where any refund is granted to the assessee under section 270(1), and—
    1. no refund is due on regular assessment; or
    2. the amount refunded under section 270(1) exceeds the amount refundable on regular assessment,
    the assessee shall be liable to pay simple interest at the rate of 0.5% on the whole or the excess amount so refunded, for every month or part of a month comprised in the period from the date of grant of refund to the date of such regular assessment.
  2. Where, as a result of an order under section 287 or 288 or 359 or 363 or 365(10) or 368 or 377 or 378, the amount of refund granted under section 270(1) is held to be correctly allowed, either in whole or in part, then, the interest chargeable, if any, under sub-section (1) shall be reduced accordingly.
  3. Where in relation to a tax year, an assessment is made for the first time under section 279, the assessment so made shall be regarded as a regular assessment for the purposes of this section.

Fee for default in furnishing statements

  1. Without prejudice to the provisions of this Act, where any person fails to deliver or cause to be delivered a statement as per section 397(3)(b) within the time prescribed therein, he shall be liable to pay by way of fee, a sum of ₹200 for every day for which such failure continues.
  2. The amount of fee referred to in sub-section (1) shall—
    1. not exceed the amount of tax deductible or collectible; and
    2. be paid before delivering or causing to be delivered the statement, as per sub-section (1).
  3. Without prejudice to the provisions of this Act, where any person who is required to furnish a statement of financial transaction or reportable account under section 508(1), fails to furnish such statement within the time prescribed under section 508(2), he shall be liable to pay by way of fee, a sum of ₹200 for every day for which such failure continues and such fee shall not exceed a sum of ₹1,00,000.

Fee for default in furnishing return of income, audited accounts and reports

  1. Without prejudice to the provisions of this Act, where any person—
    1. required to furnish a return of income under section 263, fails to do so within the due date, as specified under sub-section (1) of the said section, he shall be liable to pay by way of fee—
      1. a sum of ₹1,000, if the total income of such person does not exceed ₹5,00,000; and
      2. a sum of ₹5,000, in any other case.
    2. furnishes a return of income under section 263(5) beyond nine months from the end of relevant tax year, he shall be liable to pay by way of fee—
      1. a sum of ₹1,000, if the total income of such person does not exceed ₹5,00,000; and
      2. a sum of ₹5,000, in any other case.
    3. fails to get his accounts audited for any tax year or years and furnish the report of such audit as required under section 63, he shall be liable to pay by way of fee—
      1. a sum of ₹75,000 for a delay up to one month for which such failure continues; and
      2. a sum of ₹1,50,000 thereafter.
    4. fails to furnish a report from an accountant as required by section 172, he shall be liable to pay by way of fee—
      1. a sum of ₹50,000 for a delay up to one month for which such failure continues; and
      2. a sum of ₹1,00,000 thereafter.

Fee for default relating to statement or certificate

  1. Without prejudice to the provisions of this Act, where—
    1. the research association, University, college or other institution referred to in section 45(3)(a) or the company referred to in section 45(3)(b) fails to deliver or cause to be delivered the documents as may be prescribed in section 45(4)(a) within the time as may be prescribed therein or furnish a certificate as may be prescribed under section 45(4)(a); or
    2. the institution or fund fails to deliver or cause to be delivered a statement under section 354(1)(e), within the time as may be prescribed under that section, or furnish a certificate as may be prescribed under section 354(1)(g),
    it shall be liable to pay, by way of fee, a sum of ₹200 for every day during which the failure continues.
  2. The amount of fee referred to in sub-section (1) shall—
    1. not exceed the amount in respect of which the failure referred to therein has occurred;
    2. be paid before delivering or causing to be delivered the statement or before furnishing the certificate referred to in sub-section (1).

Fee for default relating to intimation of Aadhaar number

  1. Without prejudice to the provisions of this Act, where a person is required to intimate his Aadhaar number under section 262(6) and such person fails to do so on or before such date as may be prescribed, he shall be liable to pay such fee, as may be prescribed, not exceeding ` 1000, at the time of making intimation under the said section after the said date

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