Interest u/sec 234b & 234c

This query is : Resolved

bhavik trivedi (Querist)
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30 March 2015 assessee is resident senior citizen who is partner in firm but does not receive any interest or share of profit from the firm.
But I.T. Department charged the interest U/sec 234b & sec 234C. but as per my knowledge senior citizen assessee who does not have business income need not required to discharge advance tax liability.
Kindly clarify on the above do i require to pay off the liability or proceed for rectification?
Kindly advise the same.
Thanks in advance

bhavik trivedi

bhavik trivedi (Querist)
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11 April 2015 please advise me
experts are not provide any suggestion on the above issue.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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01 August 2024 ### **Interest Under Sections 234B and 234C for Senior Citizens**

#### **Understanding Sections 234B and 234C**

1. **Interest Under Section 234B:**
- This section deals with interest for default in payment of advance tax. Interest is levied if the advance tax paid is less than 90% of the assessed tax.

2. **Interest Under Section 234C:**
- This section deals with interest for deferment of advance tax installments. If advance tax is not paid in the prescribed installments, interest is charged under Section 234C.

#### **Senior Citizen Exemption:**

1. **Advance Tax Liability for Senior Citizens:**
- Senior citizens (aged 60 or above) are exempt from paying advance tax if they do not have income from business or profession. The exemption applies to individuals who only have income from sources like pensions, interest, or rental income.

2. **Interest Charged Incorrectly:**
- If the senior citizen does not have business income and does not receive any income from the firm (such as interest or share of profit), the advance tax provisions generally do not apply. Therefore, interest under Section 234B and 234C may have been incorrectly applied.

#### **Steps to Address the Issue:**

1. **Review the Assessment:**
- Verify if the interest charged under Section 234B and 234C is indeed incorrect due to the senior citizen’s status and lack of business income. Check the specific details mentioned in the assessment order.

2. **Rectification Process:**
- **Apply for Rectification:** If the interest has been charged incorrectly, you can file a rectification request under Section 154 of the Income Tax Act. You can apply for rectification using the income tax e-filing portal by selecting the option for “Rectification” and providing details of the incorrect interest charges.
- **Supporting Documents:** Provide supporting documents that substantiate the claim of exemption from advance tax, such as proof of senior citizen status and details of income sources.

3. **Paying the Liability:**
- **Dispute the Liability:** If you believe that the interest has been wrongly charged, you should first seek rectification. Do not pay the liability until the rectification process is completed, as paying might be seen as acceptance of the incorrect demand.

4. **Consult a Tax Professional:**
- **Professional Advice:** It’s advisable to consult a tax professional or chartered accountant who can guide you through the rectification process and ensure that all required documents and justifications are correctly provided.

#### **Summary:**

- **Senior Citizen Exemption:** Senior citizens who do not have business income are generally not required to pay advance tax.
- **Interest Charges:** If interest under Sections 234B and 234C is charged incorrectly, a rectification request should be filed to correct the mistake.
- **Action Steps:** Review the assessment details, apply for rectification, and consult a tax professional if needed.

By following these steps, you can address the incorrect interest charges and ensure that your tax records accurately reflect your tax liability.

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