Interest calculation under section 234

Under 234A (Late filing of return) - 1% per month or part thereof on the amount of tax due (total tax less advance tax and TDS) or simply on the amount of self assessment tax under section 140A, from the last date of filing of return (31 July/30 Sep/30 Nov) till the date of such filing. Eg. - If total tax due under self assessment  for FY 2011-12 was Rs 15000 and return was filed on 15.11.2012 instead of 31.07.2012, then interest under 234A will be 1% of Rs 15000 for 4 months, i.e Rs 600

Under 234B (payment of advance tax less than 90% of tax due) - 1% per month or part thereof on the amount of tax unpaid calculated from 1 April of the Assessment year till the month of filing of return. Eg. - Total tax for FY. 2011-12 was Rs 100000 and tax deposited )advance tax and TDS) was Rs 85000 till 31.03.2012, then since total tax deposited was less than 90% of tax due (Rs 90000), interest will be Rs 1200 (1% * 15000 * 8 months, assuming return was filed in Nov 2012).

Under 234C (less payment of advance tax on due dates) - 1% per month or part thereof of amount of advance tax less paid. For non-coporate assessees, advance tax to be paid is 30% by 15 sep of the FY, 60% by 15 dec of the FY and 100% by 31st March. One thing to be kept in mind is that advance tax liability arises only if it is in excess of Rs 10000 and not otherwise. Eg. - Total tax was Rs 200000, TDS and advance tax paid was Rs 120000, then for 15 sep due date, advance tax due will be Rs 60000 (30% of 200000), whereas tax deposited will be taken as Rs 36000 (30% of 120000), Hence less deposited Rs 24000, therefore interest will be Rs 720 (24000*1% for 3 months), for 15 Dec due date, tax due will be Rs 120000 (60% of 200000) and deposited will be taken as Rs 72000 (60% of 120000), shortfall by Rs 48000, hence interest will be Rs 1440 (48000*1% for 3 months) and for 31 March due date, total tax less deposited was Rs 80000 (200000-120000), interest will be Rs 800 (1% of Rs 80000 for 1 month, i.e.March). Therefore total tax due under 234C will be Rs 2960 (720 + 1440 + 800)