Interest for defaults in furnishing return of income

Where 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).

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 of (a) Where a furnished–– date for furnishing of regular assessment furnishing the return. is not made, tax on (a) under the return the total income as section 263section 263(1), (4) of income determined under or (6); or under section 270section 270(1) as section reduced by tax paid; 263(1). A B C D E (b) in (b) Where a response to a regular assessment notice under is made, tax on the section 268section 268(1) total income after the due determined under date. regular assessment as reduced by tax paid. 2. (i) Where no Due Date of Tax on the total return has been date for completion income determined furnished under furnishing of the under regular section 263section 263(1), (4) or the return assessment assessment as (6) or in response to a of income under reduced by tax notice under section under section 271section 271. paid. 268(1). section 263section 263(1). 3. (a) Where return Date Date of Amount by of income is required immediately furnishing which the tax on the by a notice under following the return. total income section issued after the last date determined on the determination of of time basis of such income under section allowed reassessment or 270(1) or after the under such recomputation completion of an notice. exceeds the tax on assessment under the total income section 270section 270(10) or determined under 271 or 279; and section 270section 270(1) or on the basis of the (b) such return is earlier assessment furnished after the under the section expiry of the time referred to against allowed under such serial number 3(a). notice. 4. (a) Where return Date Date of Amount by of income is required immediately completion of which the tax on the by a notice under following the total income section 280section 280 issued the last reassessment determined on the after the date of or basis of such determination of time recomputation reassessment or income under allowed under section recomputation section 270section 270(1) or under such 279. exceeds the tax on after the completion notice. the total income of an assessment determined under under section 270section 270(10) section 270section 270(1) or on or 271 or 279; and the basis of the (b) no return is earlier assessment furnished. under the section referred to against serial number 4(a).

Where as a result of an order under section 287section 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 —

For the purposes of this section,—

Where for any tax year, an assessment is made for the first time under section 279section 279, the assessment so made shall be regarded as a regular assessment for the purposes of this section.