Z Ltd. is a listed company on recognized stock exchange, registered in Ahmedabad (Gujarat). The management of the company finalized a restructuring scheme being 'Buy-back of its own shares' on 05th July, 2024. The compan

Computation of Additional income tax payable by Z Ltd. Particulars Amount (Rs.) Amount paid by company on buy-back of shares 20,00,000 Less: Amount received at the time of issue of shares 5,00,000 Distributed Income 15,00,000 Tax on Distributed Income @ 20% under section 115QA of the Income Tax Act 3,00,000 Add: Surcharge @ 12% 36,000 Total 3,36,000 Add: Health & Education cess @ 4% on ₹ 3,36,000 13,440 Tax Liability of Z Limited under section 115QA 3,49,440 Note: The provisions of section 115QA of the Income Tax Act are abolished with effect from 01.10.2024. The tax on buy back of shares shall be paid by shareholders w.e.f. 01.10.2024. However, in given case, buy back of shares related to 5th July, 2024 and therefore, provisions of section 115QA are made applicable. The principal officer of the company and the company shall be liable to pay the tax to the credit of the Central Government within 14 days from the date of payment of any consideration to the shareholder on buy back of shares. Accordingly, Z Ltd. is required to deposit the tax by 13th August, 2024. Z Ltd.is liable to pay interest @ 1% per month or part of the month under section 115QB if the tax was not paid by the due date. Amount of Interest = ₹ 3,49,400 (rounded off as per rule 119A) x 2% (for 2 months) = ₹ 6,988.