Answer

1. F

   Facts

   Interest keeps running on unpaid tax until it is assessed and paid. Paying the tax you accept early reduces interest. It also shows good faith in the proceedings.

2. P

   Provisions and law

   • Sec 234B (now Sec 424)Interest at 1% a month where advance tax paid is less than 90% of the tax assessed
   • Sec 140A (now Sec 266)Tax and interest due on the return must be paid as self-assessment tax before filing
   • Sec 148 (now Sec 280)Before reassessing, the officer issues a notice asking for a return for that year, with the Sec 148A order and approval
3. A

   Analysis

   Sec 234B interest at 1% a month runs from the start of the assessment year, so for an old year it can already be large; three years on ₹1,00,000 of tax is about ₹36,000. Paying now stops it growing on the amount paid. Use the right assessment year and the right minor head as advised, and mention the payment in your reply or return. Pay only on what you accept; disputed amounts can be argued.

4. C

   Conclusion

   1. 1Work out the tax on the part you accept.
   2. 2Pay through e-Pay Tax for the correct assessment year.
   3. 3Include it in the Sec 148 return or tell the officer.
   4. 4Keep the challan for the order and any appeal.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.