(1) Where in any financial year advance tax paid by an assessee on the basis of own estimation together with the tax deducted or collected at source, if any, under this Part is ¹[less than] 75% (seventy-five percent) of the amount of tax payable by him as determined on regular assessment, the assessee shall pay simple interest at the rate of 10% (ten percent) per annum on the amount of difference between ¹[the total tax so paid and] 75% (seventy five percent) of ¹[the tax determined on regular assessment]:

       Provided that the rate of interest shall be 50% (fifty percent) higher if the return is not filed on or before the Tax Day.

(2) The period for which the interest under sub-section (1) is payable shall be the period from the first day of July next following the financial year in which the advance tax was applicable to the date of regular assessment in respect of the income of that year or a period of 2 (two) years from the said 1st (first) day of July, whichever is shorter.

(3) Notwithstanding anything contained in sub-sections (1) and (2), where—

(a) tax is paid under section 173; or

(b) provisional assessment has been made under section 185 but regular assessment has not been made, in such case, the simple interest shall be computed in accordance with the following provisions, namely:—

(i) up to the date on which tax under section 173 or as provisionally assessed, was paid;

(ii) thereafter, such simple interest shall be computed on the amount by which the tax so paid falls short of the said 75% (seventy-five percent) of the assessed tax.

(4) Where, as a result of appeal, revision or reference, the amount on which interest was payable under sub-section (1) has been reduced, the amount of interest payable shall be reduced accordingly and the excess interest paid, if any, shall be refunded together with the refundable tax.

(5) For purposes of this section, “regular assessment” includes the acceptance of revised return or the assessment made as a result of the audit under section ²[182].