Ramhesh (Properiter) 10 June 2013

Interest rate on tax demand notice

Need yourhelp from Tax experts for the below issue

1) For AY 2009 - 2010 IT department had raised Demand Letter for RS 40862 due to change of my location i did not recieved nor noticed this Demand letter sent by IT Dept

2) For AY 2011-2012 i am suppose to get IT refund for RS 13,558 based on ITR filled i got intimation this amount is being adjusted with outstanding Demand letter

3) I am ready to pay the remaining amount to clear by IT dues Now my doubt is whether should i pay the remaining amount as it is or should i include any Intrest amount included, From which date intrest need to be calculated, What is the percentage on Interest to be paid

Can you please help me in sorting out this issue

Reply Follow

4 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 ) 10 June 2013

Interest calculation must be after adjustments of the due amount date.

Ramhesh (Properiter) 10 June 2013

Hi,

Thank you for the update. I am not clear about your comments can you please elborate more

R RAJAGOPALAN (ADVOCATE) 12 June 2013

Interest for belated payment of a Demand raised under S.156 of the Income Tax Act, can be levied only in accordance with the provisions of Section 220(2) of the Income Tax Act,1961.

Presently, the rate of interest is 1% per month, and the period will be the period between the end of the grace period of one month from the Date of Service of the Demand Notice, and the Date of Payment.

It is a question of fact whether the Demand Notice for the Assessment Year 2009-10 was actually served on you or not, and if not served, why.

You may take up the matter with your Assessing Officer as early as possible.