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.