Amendment of section 234B.
53. In section 234B of the Income-tax Act, in sub-section (1), in Explanation 1, after clause (i), the following clause shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2007, namely:––
“(ia) any relief of tax allowed under section 89;”.
Notes on Clauses:
Clause 53 of the Bill seeks to amend section 234B of the Income tax Act relating to interest for defaults in payment of advance tax.
The said section 234B, inter alia, provides for charging of interest for defaults in payment of advance tax.
It is proposed to insert a new clause (ia) in Explanation 1 to sub-section (1) of the said section, so as to provide that “any relief of tax allowed under section 89” shall also be reduced from the tax on the total income for the purpose of charging interest under the said section.
These amendments will take effect retrospectively from 1st April, 2007 and will, accordingly, apply in relation to the assessment year 2007-08 and subsequent assessment years.
