Section 216

Interest payable by assessee in case of under estimate, etc.

216. Where, on making the regular assessment, the Income-tax Officer finds that any assessee has—

(a) under sub-section (1) or sub-section (2) or sub-section (3) of section 212 underestimated the advance-tax payable by him and thereby reduced the amount payable in any of the first three instalments ; or

(b) under section 213 wrongly deferred the payment of advance-tax, a part of his income ;

he may direct that the assessee shall pay simple interest at ¹[six] per cent per annum—

(i) in the case referred to in clause (a) for the period during which the payment was deficient, on the difference between the amount paid in each such instalment and the amount which should have been paid, having regard to the aggregate advance-tax actually paid during the year ; and

(ii) in the case referred to in clause (b), for the period during which the payment of advance-tax was so deferred.

Explanation.—For the purposes of this section, any instalment due before the expiry of six months from the commencement of the previous year in respect of which it is to be paid shall be deemed to have become due fifteen days after the expiry of the said six months.

[As amended by the Finance Act, 1965]