960 (Income Tax) What is the Difference between Penal Interest and Penalty (Concept) ? Video Link - https://youtube/watch?v=7rKPojAd_8E Narration By - Amlan Dutta ! For previous year 2013 14 , i had bank FD interest income 10 lacs on which bank has deducted 1 lac as TDS adding to my tax credit However , tax as per slabs works out to be 1.33 lacs I have not build upon my tax credit of this balance 0.33 lacs by paying advance tax So , the revenue is deprived of taxes that is due to it in the financial year itself Nowi decide to file return in the month of september 2014 and pay whatever dues now only ! So , the revenue charges me interest from the start of the year till the day i pay taxes finally Not only this , for advance tax installments not paid , it charges me penal interest under section 234 C Not only above two , it also charges me penal interest at 1 % on unpiad taxes for delay in filing of return under section 234 A But hey wait a minute he doesnt charge , the return does all this and iut gets computed in the return Once i submit the return in september (belated ) , he has power to demand me 5000 Rs as penalty for filing late return under section 271 F Likewise , later if he does scrutiny assessment and discovers that i have concelaed tax , he may serve me demand notice under section 156 and serve upon penalty under section 271 and subsections for penalty Hope this clears the thick difference between levy of penal interest and penalty ! Peace , Amlan Dutta - I didn;t study over the surface ...i studies as hard as any other kid but when i went deep , my joy widened knowing that someday i wil give it for free to everyone seeking to learn !
Posted on: Wed, 17 Sep 2014 18:46:55 +0000
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