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What is the tax rate in force when Finance Act is not passed?

If a person is required to make payment of ‘advance tax’ or ‘tax deducted at source’ (TDS) or ‘tax collection of tax’ (TCS) for any assessment year (AY) on a date when the rate or rates in force for that AY has not yet been made by the Finance Act, then at what rate or rates the ‘advance tax’ or TDS or TCS shall be paid or what shall be the rate applicable? Many a time Finance Act is not passed on a date when the liability to made TDS/TCS or even first installment of Advance tax in the case of a company is due. If on the first day of any AY provision has not been made by the Finance Act for charging of income tax for that AY the Income Tax Act, 1961, shall have effect until such provision is so made as if the provision in force in the preceding AY or the provision proposed in the Finance Bill then before Parliament, whichever is more favourable to the assessee, were actually in force. [Refer section 294]

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» Great Dada. So lucid and to the point. It gives so much more clarity, especially to those who are working as assessing officers. One of the most ch...
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