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What is Interest payable by Government? What is Interest payable by assessee? Section 214 and 215 of Income Tax Act 1961

Interest payable by Government and Interest payable by assessee are defined under section 214 and 215 of Income Tax Act 1961. Provisions under these Sections are :

Section 214 of Income Tax Act "Interest payable by Government"

Section 214. (1) The Central Government shall pay simple interest at fifteen per cent per annum on the amount by which the aggregate sum of any instalments of advance tax paid during any financial year in which they are payable under sections 207 to 213 exceeds the amount of the assessed tax from the 1st day of April next following the said financial year to the date of the regular assessment for the assessment year immediately following the said financial year, and where any such instalment is paid after the expiry of the financial year, during which it is payable by reason of the provisions of section 213, interest as aforesaid shall also be payable on that instalment from the date of its payment to the date of regular assessment :

 

214. (1) The Central Government shall pay simple interest at fifteen per cent per annum on the amount by which the aggregate sum of any instalments of advance tax paid during any financial year in which they are payable under sections 207 to 213 exceeds the amount of the assessed tax from the 1st day of April next following the said financial year to the date of the regular assessment for the assessment year immediately following the said financial year, and where any such instalment is paid after the expiry of the financial year, during which it is payable by reason of the provisions of section 213, interest as aforesaid shall also be payable on that instalment from the date of its payment to the date of regular assessment :

(2) On any portion of such amount which is refunded under this Chapter, interest shall be payable only up to the date on which the refund was made.

(3) This section and sections 215, 216 and 217 shall not apply in respect of any assessment for the assessment year commencing on the 1st day of April, 1989, or any subsequent assessment year and, in the application of the said sections to the assessment for any earlier assessment year, references therein [except in sub-section (1A) and sub-section (3) of section 215] to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.

Explanation 1.-In this section, "assessed tax" shall have the same meaning as in sub-section (5) of section 215.

Explanation 2.-Where, in relation to an assessment year, an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purposes of this section.

Section 215 of Income Tax Act "Interest payable by assessee"

Section 215. 53(1) Where, in any financial year, an assessee has paid advance tax under section 209A or section 212 on the basis of his own estimate (including revised estimate), and the advance tax so paid is less than seventy-five per cent of the assessed tax, simple interest at the rate of fifteen per cent per annum from the 1st day of April next following the said financial year up to the date of the regular assessment shall be payable by the assessee upon the amount by which the advance tax so paid falls short of the assessed tax :

Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect as if for the words "seventy-five per cent", the words "eighty-three and one-third per cent" had been substituted.
(2) Where before the date of completion of a regular assessment, tax is paid by the assessee under section 140A or otherwise,-

(i) interest shall be calculated in accordance with the foregoing provision up to the date on which the tax is so paid ; and

(ii) thereafter, interest shall be calculated at the rate aforesaid on the amount by which the tax as so paid (in so far as it relates to income subject to advance tax) falls short of the assessed tax.

(3) Where as a result of an order under section 147 or section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount on which interest was payable under sub-section (1) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and-
(i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee, a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly;

(ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded.

(4) In such cases and under such circumstances as may be prescribed54, the Assessing Officer may reduce or waive the interest payable by the assessee under this section.
(5) In this section and sections 217 and 273, "assessed tax" means the tax determined on the basis of the regular assessment (reduced by the amount of tax deductible in accordance with the provisions of sections 192 to 194, section 194A, section 194C, section 194D, section 195 and section 196A so far as such tax relates to income subject to advance tax and so far as it is not due to variations in the rates of tax made by the Finance Act enacted for the year for which the regular assessment is made.

(6) Where, in relation to an assessment year, an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purposes of this section and sections 216, 217 and 273.

Income Tax Act 1961

What are the Consequences of failure to deduct or pay? What is the meaning of Deduction only one mode of recovery? Section 201 and 202 of Income Tax Act 1961

What is Certificate for tax deducted? How to apply for Tax deduction and collection account number? Section 203 and 203A of Income Tax Act 1961

What is Furnishing of statement of tax deducted? What is the Meaning of person responsible for paying? Section 203AA and 204 of Income Tax Act 1961

What is Bar against direct demand on assessee? What is the meaning Persons deducting tax to furnish prescribed returns? Section 205 and 206 of Income Tax Act 1961

What is Furnishing of quarterly return in respect of payment of interest to residents without deduction of tax? What is the Requirement to furnish Permanent Account Number? Section 206A and 206AA of Income Tax Act 1961

What is Profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc? Section 206C of Income Tax Act 1961

What is Tax collection account number? What is Processing of statements of tax collected at source? Section 206CA and 206CB of Income Tax Act 1961

What is Liability for payment of advance tax? What are Conditions of liability to pay advance tax? Section 207 and 208 of Income Tax Act 1961

What is Computation of advance tax? What is Payment of advance tax by the assessee of his own accord or in pursuance of order of Assessing Officer? Section 209 and 210 of Income Tax Act 1961

What is Installments of advance tax and due dates? Section 211 of Income Tax Act 1961

What is Interest payable by Government? What is Interest payable by assessee? Section 214 and 215 of Income Tax Act 1961

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