1573. Surcharge on advance tax payable by companies during the financial year 1971-72

The Act provides for the levy of a surcharge at the rate of 2.5 per cent on advance tax payable under the Income-tax Act by all companies during the financial year 1971-72. The amount of the surcharge is required to be paid by companies on their own motion, without the requirement of the service of any notice of demand by the Income-tax Officer, on or before 15-3-1972. The surcharge paid will be treated as payment of income-tax in respect of the income assessable for the assessment year 1972-73 and credit therefor will be given for the purpose of self-assessment under section 140A, provisional assessment under section 141A and regular assessment for that assessment year. In case of failure to make the payment on or before the due date, the company will be deemed to be an assessee in default and will be liable to pay simple interest at the rate of 9 per cent per annum. The provisions of the Income-tax Act relating to imposition of penalty for default in payment of tax and recovery of taxes will apply with necessary modifications.

It is necessary to note that although the surcharge is levied at the rate of 2.5 per cent on the income-tax payable in advance, it is a distinct and separate levy and is not to be regarded as a part of the advance tax payable by the company in accordance with the provisions of sections 208 to 219 of the Income-tax Act. Hence, the amount required to be paid by way of surcharge will not be taken into account for the purposes of applying the provisions of section 214 [interest payable by Government], sections 215 to 217 [interest payable by assessees in certain circumstances] and section 273 [penalty for furnishing false estimate of, or failure to pay, advance tax].

Source : Circular No. 77, dated 8-8-1972.

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