Amendment of section 234C.
53. In section 234C of the Income-tax Act, in sub-section (1),––
(i) in the first proviso, for clause (d), the following clause shall be substituted, namely:––
“(d) the amount of dividend income,”;
(ii) the Explanation shall be numbered as Explanation 1 thereof and after Explanation 1 as so numbered, the following Explanation shall be inserted, namely: ––
‘Explanation 2.––For the purposes of this sub-section, the term “dividend” shall have the meaning assigned to it in clause (22) of section 2, but shall not include sub-clause (e) thereof.’.
Notes on Clauses:
Clause 53 of the Bill seeks to amend section 234C of the Income-tax Act relating to interest for deferment of advance tax.
The first proviso to sub-section (1) of the said section provides for categories of incomes for which there will be no charge of interest under the said section, in the event of failure to estimate such incomes resulting in a shortfall in the advance tax payments and tax due has been paid in the subsequent advance tax instalments.
It is proposed to substitute clause (d) of the first proviso to said sub-section to include dividend income along with capital gains therein, so as to provide that the interest under the said section shall not be applicable to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of under-estimate or failure to estimate dividend.
It is further proposed to insert Explanation 2 in the said sub-section to define the term “dividend”.
These amendments will take effect from lst April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years.
