here the return of income for any tax year is furnished after the due date or is not furnished, the assessee shall be liable to pay simple interest as per the following formula:— I = 1% x A x T where,— I = the interest payable; A = the amount of tax on which interest is payable, as specified in sub-section (2); T = number of months comprised in the period commencing on the date immediately following the starting date and ending on the end date, both specified in sub-section (2). (2) For sub-section (1), in respect of the circumstances specified in column B of the Table below, the starting date shall be the date specified in column C, the ending date shall be the date as specified in column D and the amount of tax on which interest is payable is specified in column E. Table Sl. No. Circumstances Starting Ending date The amount of tax on date which interest is payable A B C D E 1. Where the return is Due date for Date of (a) Where a furnished under furnishing furnishing regular assessment is section 263(1), (4) or the return of the not made, tax on the (6) or in response to a of income return. total income as notice under section under determined under 268(1) after the due section section 270(1) as date. 263(1). reduced by tax paid; (b) Where a regular assessment is made, tax on the total income determined under regular assessment as reduced by tax paid. 2. Where no return has Due date for Date of Tax on the total been furnished under furnishing completion income determined section 263(1), (4) or the return of of the under regular (6) or in response to a income under assessment assessment as notice under section section under reduced by tax paid. 268(1). 263(1). section 271.
Sl. No. Circumstances Starting Ending date The amount of tax on date which interest is payable A B C D E 3. (a) Where return The last Date of Amount by of income is required date of time furnishing which the tax on the by a notice under allowed the return. total income section 280 issued under such determined on the after the notice. basis of such determination of reassessment or income under section recomputation 270(1) or after the exceeds the tax on completion of an the total income assessment under determined under section 270(10) or section 270(1) or on 271 or 279; and the basis of the (b) such return is earlier assessment furnished after the under the section expiry of the time 270(1) or 271 or allowed under such 279. notice. 4. (a) Where return The last Date of Amount by of income is required date of time completion which the tax on the by a notice under allowed of the total income section 280 issued under such reassess- determined on the after the notice. ment or basis of such determination of recomputa- reassessment or income under section tion under recomputation 270(1) or after the section 279. exceeds the tax on completion of an the total income assessment under determined under section 270(10) or section 270(1) or on 271 or 279; and the basis of the (b) no return is earlier assessment furnished. under the section 270(1) or 271 or 279 . (3) Where as a result of an order under section 287 or 288 or 359 or 363 or 365(10) or 368 or 377 or 378, the amount of tax on which interest was payable under sub-sections (1) and (2) has been increased or reduced, the interest shall be increased or reduced accordingly, and in a case—
(a) where the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in such form as may be prescribed specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 289 and the provisions of this Act shall apply accordingly; (b) where the interest is reduced, the excess interest paid, if any, shall be refunded. (4) For the purposes of this section,— (a) tax on total income as determined under section 270(1) shall not include the additional income-tax, if any, payable under section 267; (b) tax on the total income determined under regular assessment shall not include the additional income-tax payable under section 267; (c) interest payable under sub-section (1) shall be reduced by the interest, if any, paid under section 266 towards the interest chargeable; (d) “tax paid” means–– (i) advance tax, if any, paid; (ii) any tax deducted or collected at source; (iii) any relief of tax allowed under section 157; (iv) any relief of tax allowed under section 159(1) on account of tax paid in a country outside India; (v) any relief of tax allowed under section 159(2) on account of tax paid in a specified territory outside India referred to in that section; (vi) any deduction, from the Indian income-tax payable, allowed under section 160, on account of tax paid in a country outside India; and (vii) any tax credit allowed to be set off as per sections 206(1)(m) to (p) and 206(2)(e) to (h).