What is the rule for calculating Interest on tax to be paid ?



I have 2 form 16 for last year. So after calculating combined income from both organisations, i need to pay near about 70K additionally. So will i be charged interest for the income and if so what is the calculation to find out the tax interest to be paid and rate of interest ?

What is the rule for calculating Interest on tax to be paid ?
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2 Replies to “What is the rule for calculating Interest on tax to be paid ?”

  1. Section 234B. Interest for defaults in payment of advance tax
    Where, an assessee who is liable to pay advance tax has failed to pay such tax or, where the advance tax paid by such assessee is less than ninety per cent 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 comprised in the period from the 1st day of April next following such financial year to the date of determination of total income under sub-section (1) of section 143,
    and where a regular assessment is made, to the date of such regular assessment, on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax.

    You were supposed to pay advance tax. You will be required to pay interest @ 1% every month from 01.04.2010 till you pay taxes. At present 4 months.

    HMT






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