Interest levy under three sections 234A, 234B and 234C

MOHAN ARYA | Last updated: 27 July 2021

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Even though the deadline for filing Income Tax Returns (ITR) for FY 2020-21 was extended to September 30, 2021, there's no relief for delayed tax payments. Taxpayers must pay interest on outstanding tax under Sections 234A, 234B, and 234C of the Income Tax Act. Section 234A applies to late filing of returns, Section 234B covers defaults in paying advance tax, and Section 234C deals with deferring advance tax payments.

Income Tax Return (ITR) filing last date has been extended to September 30, 2021, due to the COVID-19 pandemic. The deadline has been announced by the Central government for filing ITR for Financial Year 2020-21 but Central Government has not announced any relief, in case of delay in paying the inco

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FAQ :

Section 234A levies simple interest at 1% per month or part of a month for furnishing your income tax return after the due date or failing to furnish it altogether. Relief is available if your self-assessment tax is up to Rs 1 lakh.

Interest under Section 234B is charged at 1% per month or part of a month if you have not paid advance tax or paid less than 90% of your total tax liability for the financial year.

Section 234C addresses the deferment of advance tax. It imposes a 1% monthly interest on the shortfall if the advance tax paid by specific dates (June 15, September 15, December 15, March 15) is less than the prescribed percentages of your returned income.

No, the Central Government has not announced any relief for delayed income tax payments or outstanding tax, even though the ITR filing deadline was extended due to COVID-19.

The simple interest rate for defaults under Sections 234A, 234B, and 234C is 1% for every month or part of a month.