If any such taxpayer fails to file the return within the tax day under section 166, the tax of the tax payer shall be determined and paid in the following manner, without prejudice to the liability arising under other provisions of this Act, namely:-

c = a * (1 + 0.04 x b), where,

c = Total amount of tax payable, where-

(i) the taxpayer files the return on any day after Tax Day; or

(ii) the tax authority assesses the taxpayer’s tax on any day subsequent to the tax day,

a = Total amount of tax the taxpayer would have paid if he had filed the return on the tax day, provided that-

(i) the tax-exempted income shall be included in the total income and shall be taxed at the regular rate; and

(ii) shall not include any penalty or tax imposed or levied under this Act other than minimum tax, surcharge and simple interest,

b = Number of months determined as under, namely:-

1. i) the number of months after the expiry of the tax day which shall not exceed 24 (twenty four); and
2. ii) A fraction of a month shall also be counted as 1 (one)month.