Section 118 : Interest to be charged where person making payment in instalments makes lesser payment of estimated tax

(1) If, with respect to the amount of instalment tax to be paid by any person in any income year under Section 94, the amount paid pursuant to clause (b) becomes higher than that of clause (a), interest shall be charged on such more amount pursuant to sub-section (2):

a) Amount of each instalment paid by such person in any income year,

b) Estimated amount or amount of revised estimate, if correct, and, if not correct, ninety percent tax amount of each instalment period in such income year to be submitted by the person mentioned in clauses (a) and (b) of Section 3.

2) There shall be imposed on the person referred to in sub-section (1) an interest at the general interest rate of each month and portion of the month for the following period from the date for submission of the instalment of that year:

a) In the case of a person required to assess tax pursuant to sub-section (1) of Section 99, till the date for submission of income return,

b) In the case of a person for whom the revised tax has been assessed by the Department for the first time under Section 101 as not being tax assessed pursuant to sub-section (1) of Section 99 till the date of submission of notice of such amended tax assessment under Section 102.

Explanation: For the purpose of this Section, “amount to be submitted on instalment” means the instalment amount computed on the basis of the provision of sub-section (5) of Section 95 for not submitting a revised estimate once the estimate has been submitted pursuant to sub-section (1) of Section 94 and for those not submitting estimate that the Department estimates pursuant to sub-section (7) of Section 95 and for those submitting revised estimates and where the Department estimates is not satisfied with the estimate or revised estimate submitted pursuant to sub-section (7) of Section 95