Interest for default in payment of advance income-tax.
210. (1) Where an assessee defaults in payment of advance income-tax, he shall be liable to pay simple interest at the rate of one per cent. per month in the circumstances specified in sub-section (2) for the period mentioned in sub-section (3) on the amount computed under sub-section (4).
(2) The circumstances referred to in sub-section (1) shall be the following, namely:—
(a) where the assessee is liable to pay advance income-tax under section 205 and has failed to pay such tax; or
(b) where the advance income-tax paid by such assessee is less than ninety per cent. of the assessed tax.
(3) The period referred to in sub-section (1) shall in a case referred to in sub-section (2) commence on the 1st day of April next following the financial year and—
(a) end on the date of determination of total income under sub-section (1) of section 149; or
(b) end on the date of assessment, where an assessment has been made under section 155 or section 156 or an assessment under section 159 made for the first time.
(4) The amount referred to in sub-section (1) shall be,—
(a) the assessed tax less the advance tax; and
(b) in a case where the assessee has paid self-assessment tax under section 147 before the date of determination of total income or the date of an assessment referred to in clause (b) of sub-section (3), as the case may be,—
(i) the assessed tax less the advance tax, for the period up to the date on which the self assessment tax is paid; and
(ii) the assessed tax less the advance tax and such self-assessment tax, for the period commencing immediately after the date on which such self-assessment tax is paid.
(5) The assessed tax referred to in sub-section (4) shall be calculated in accordance with the following formula—
A - B
Where A = the amount of the tax on the total income determined under sub-section (1) of section 149, and where an assessment referred to in clause (b) of sub-section (3) has been made, the amount of tax on the total income determined on such assessment;
B = the aggregate of —
(i) any tax deducted or collected at source;
(ii) any relief of tax claimed under section 207; and
(iii) any tax credit available for set-off under section 106.
(6) Where tax is paid under section 147 or otherwise before the determination of total income under sub-section (1) of section 149 or completion of an assessment referred to in clause (b) of sub-section (3), interest shall be calculated—
(i) in accordance with sub-sections (1) to (5), up to the date on which the tax is so paid and reduced by the interest, if any, paid under section 147 towards the interest chargeable under this section; and
(ii) thereafter, at the rate specified in sub-section (1) on the amount by which the tax so paid together with the advance tax paid falls short of the assessed tax.
(7) In a case where as a result of reassessment under section 159 (not being an assessment made for the first time), the amount of tax on total income, as referred to in sub-section (5) is increased then, in addition to the interest under sub-section (1), the assessee shall be liable to pay simple interest at the rate of one per cent. per month for the period mentioned in sub-section (8) on the amount computed under sub-section (9).
(8) The period referred to sub-section (7) shall commence on the day immediately following the end of the period, as applicable, mentioned in sub-section (3) and end on the date of reassessment under section 159.
(9) The amount referred to in sub-section (7) shall be the amount by which the tax on the total income determined on the basis of reassessment under section 159 exceeds the relevant amount determined in variable A in the formula contained in sub-section (5).
(10) The interest payable under this section shall be increased or reduced, in accordance with the variation in the amount on which interest was payable under this section, on account of any rectification, revision or appellate order under this Code.
(11) The Assessing Officer shall serve on the assessee a notice of demand in such form as may be prescribed specifying the sum payable on account of increase in the interest referred to in sub-section (10) and such notice shall be deemed to be a notice under section 162 and the provisions of this Code shall apply accordingly.
(12) The excess interest paid, if any, shall be refunded in a case where the interest is reduced under sub-section (10).
