Niketan Ltd., a domestic company, purchases its own unlisted shares on 13th August, 2024. The consideration for buyback amounted to ₹16 lakhs, which was paid on the same day. Niketan Ltd. had received ₹12 lakhs on issue

Computation of Tax Liability Particulars Amount (₹) Consideration for Buy-Back 16,00,000 Less: Amount received on Issue of shares (12,00,000) Distributed income 4,00,000 Tax @ 20% 80,000 Surcharge @ 12% of ₹80,000 9,600 Total tax and surcharge 89,600 Health & Education Cess @ 4% of ₹89600 3,584 Tax Liability 93,184 The additional income-tax was payable on or before 27th August, 2024 (i.e. within 14 days from the date of buy back of shares). However, the same was paid only on 12th November, 2024. Thus, interest under section 115QB is attracted @ 1% for every month or part of the month on the amount of tax not paid or short paid for the period beginning from the date immediately after the last date on which such tax was payable and ending with the date on which the tax is actually paid. In this case, the period for which interest @ 1% per month or part of a month is leviable is calculated as under for 3 months (28th August, 2025 to 13th November): Interest = ₹(93184 x 1/100 x 3) = ₹2795.52 or ₹2796 (r/off)