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Interest U/s 234A, 234B, 234C and 244A


SECTION 234A: INTEREST FOR DEFAULT IN FURNISHING RETURN OF INCOME
If an assessee file his return after due date allowed in Income Tax Act (i.e. after 31st July) Interest will be charged for default in furnishing Income Tax Return.

S No. Particulars Description

1

Rate of Interest

Simple Interest @ 1% per month or part of the month

2

Amount on which Interest is due for payment.

Interest is payable on tax determined after deducting the following:

  • Tax deducted &/ or collected at source;
  • Advance Tax paid by the assessee;
  • The amount of relief;


Interest U/s 234 B will be Charged on Income Tax, if an Assessee who is liable to pay the advance tax and failed to
pay the advance tax.

S No. Particulars Description

SITUATION I

1

Rate of Interest

Simple Interest @ 1% per month or part of the month

2

Amount on which Interest is due for payment.

Interest is payable on assessed tax.

3

Period for which Interest is payable

From April 1st of the assessment year to the date of determination of income U/s 143(1) or where Regular assessment is made to the date of regular assessment.

SITUATION II

1

When Interest is payable

An assessee who has paid Advance tax but the amount of advance tax is less than 90% of the assessed tax.

2

Amount on which interest is payable

Interest is payable on Assessed tax less Advance Tax. 

3

Rate of Interest

Simple Interest @1% per month for each month or part of the month.

4

Period for which Interest is payable

From April 1st of the assessment year to the date of determination of income U/s 143(1) or where Regular assessment is made to the date of regular assessment.

SECTION 234C: INTEREST FOR DEFERMENT IN PAYMENT OF ADVANCE TAX
Interest U/s 234 B will be Charged on Income Tax, If an Assessee who is liable to pay the advance tax and failed to pay the advance tax every quarter with the Provision of Income Tax Act.
S No. Particulars Description

SITUATION I

1

When Interest is due for payment under this section

If Advance tax paid on/ before September 15th is less than 30%

2

Rate of Interest

Simple Interest @ 1% per month or part of the month

3

Amount on which Interest is due for payment.

30% of (Tax on total income the return of income minus Tax deducted/ collected at source)
lessAmount of Advance tax paid on/ before September 15th of the Financial year immediately preceeding the relevant assessment year

4

Period for which Interest is payable

3 months

SITUATION II

1

When Interest is due for payment under this section

If Advance tax paid on/ before December 15th is less than 60%

2

Rate of Interest

Simple Interest @ 1% per month or part of the month

3

Amount on which Interest is due for payment.

60% of (Tax on total income declared in the return of income minus Tax deducted/ collected at source)
lessAmount of Advance tax paid on/ before December 15th of the Financial year immediately preceeding the relevant assessment year. 

4

Period for which Interest is payable

3 Months

SITUATION III

1

When Interest is due for payment under this section

If Advance tax paid on/ before March 15th is less than 100%

2

Rate of Interest

Simple Interest @ 1% per month or part of the month

3

Amount on which Interest is due for payment.

100% of (Tax on total income declared in the return of income minus Tax deducted/ collected at source)
lessAmount of Advance tax paid on/ before March 15th of the Financial year immediately preceding the relevant assessment year.

4

Period for which Interest is payable

1 Month

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