Interest under section 234 A,B and C

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Daya

Daya (Querist)

02 March 2022 Please reply in brief.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

03 March 2022 Interest under section 234A is imposed when there’s a delay in filing income tax returns. Are you always late on filing your income tax returns? If yes, you may be in danger of attracting this penalty. The due date for filing the returns is usually before July 31 of every following assessment year. Under this Section, interest is charged at 1 % on the outstanding tax amount and must be paid from the first day after the due date of filing the return until the date of the actual filing of the return.

While interest under section 234B is imposed if you make incomplete tax payments. It is also levied in case of a delay in the payment of advance tax. You must pay interest under Section 234B if you are liable to pay advance tax but have failed to do so. However, it is also imposed if you have paid advance tax but the amount is less than 90% of the assessed tax.

Interest under section 234C is imposed when there is a delay in payment of an instalment of advance tax.

You pay interest under Section 234C if,

Advance Tax is paid on or before 15th June is less than 12% of Assessed Tax
Advance Tax is paid on or before 15th September is less than 36% of Assessed Tax
Advance Tax is paid on or before 15th December is less than 75% of Assessed Tax
Advance Tax is paid on or before 15th March is less than 100% of Assessed Tax

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