What is Interest payable for non-payment of tax by domestic companies? When company is deemed to be in default? Section 115P and 115Q of Income Tax Act 1961

Interest payable for non-payment of tax by domestic companies and when company is deemed to be in default are defined under sections 115P and 115Q of Income Tax Act 1961. Provisions under these Sections are :

Section 115P of Income Tax Act "Interest payable for non-payment of tax by domestic companies"

Section 115P. Where the principal officer of a domestic company and the company fails to pay the whole or any part of the tax on distributed profits referred to in sub-section (1) of section 115-O, within the time allowed under sub-section (3) of that section, he or it shall be liable to pay simple interest at the rate of one per cent for every month or part thereof on the amount of such tax for the period beginning on the date immediately after the last date on which such tax was payable and ending with the date on which the tax is actually paid.

 

Section 115Q of Income Tax Act "When company is deemed to be in default"

Section 115Q. If any principal officer of a domestic company and the company does not pay tax on distributed profits in accordance with the provisions of section 115-O, then, he or it shall be deemed to be an assessee in default in respect of the amount of tax payable by him or it and all the provisions of this Act for the collection and recovery of income-tax shall apply.

Explanation.-
For the purposes of this Chapter, the expression "dividends" shall have the same meaning as is given to "dividend" in clause (22) of section 2 but shall not include sub-clause (e) thereof.

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