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Interest U/S.234

CA SUBBIAH K (SENIOR MANAGER - F&A) (105 Points)

02 August 2008

While calculating the interest U/S.234B on tax liability, whether we have add interest U/S.234C to the tax liability?

In the same way, While calculating the interest U/S.234A on tax liability, whether we have add interest U/S.234C & 234B to the tax liability?

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19 Replies

M.Sriram Shenoy (CA Final) (814 Points)
Replied 02 August 2008

No. Interest u/s.234A, B, C should be calculated independently. Interest under either of the sections should not be added while calculating respective interest workings.

Rajesh (Service) (176 Points)
Replied 02 August 2008

CA RAMESH KUMAR AHUJA (CA, DISA, LLB) (5452 Points)
Replied 04 August 2008

No, it is not to be included for calculating the interest u/s 234B otherwise it will tentamount to payment of compound interest u/s 234C while simple interest is payable u/s 234A, B or C.

Joji Abraham (Service) (20 Points)
Replied 18 August 2008

Please explan the method for calculating interest U/S.234B and U/s 234C.

venkatesh c (Audit) (63 Points)
Replied 18 August 2008

Interest u/s 234A is to be calculated if the payment of the tax is after the due date of filing the returns [as mentioned for the particular assessee u/s139(1)] @ 1% per month on net tax payable(after TDS Deduction).

Interest u/s 234B is to calculated if the payment of tax is after the last day of the previous year @ 1% per month on the net tax payable.

Interest u/s 234C is to be calculated if the advance tax hasn't been sufficiently paid within the due dates.

Due dates and the amount required to be paid for

Companies

June 15th - 15% of Net tax

Sep 15th - 45% of net tax

Dec 15th - 75% of Net tax

March 15th - 100% of Net tax

Other assessees

Sep 15th - 30%

Dec 15th - 60%

Mar 15th - 100%

If the advance Taxes are not paid within the due dates,

then for the deffecient amount interest will be charged at 1% per month

i e , 3% for all the defeciencies upto march

and for the defeciency in march advance tax has to charged @ 1% only

Hemant Medatwal (Services) (43 Points)
Replied 01 September 2008

i m salaried person & having tax liability of Rs.10217/-for a.y. 2008-09. There is no tds on salary / no payment of advance tax. pls tell me what will the penalty / interest etc. u/s 234a,b,c ? pls give solution

PRAVEEN (Finance Manager) (81 Points)
Replied 01 September 2008

Hi Hemant

Please find the calculation Below.

Interest U/s 234A( Taken as Return filied in the month of Sep 2008)

Interest = 10217*1%*2=204/-

Interest u/s 234B

Interest= 10217*1%*6Months=613/-

Interest U/s 234C

Interest -Sept- 30% of 10217= 10217*30%*1%*3=92/-

Interest -Dec- 60% of 10217 =10217*60%*1%*3=184/-

Interest - Mar- 100% of 10217= 10217*100%*1%=102/-

Total Interest U/s 234C = 378/-

Therefore Total Interest Payable = 204+613+378=1195/-

(Guest)

Originally posted by :M.Sriram Shenoy
"	No. Interest u/s.234A, B, C should be calculated independently. Interest under either of the sections should not be added while calculating respective interest workings.	"

RAJBIR SINGH AHLAWAT (ACCOUNTANCY) (22 Points)
Replied 02 May 2009

income tax for the year 2007-08 Rs.38445 of company and return file on 30th september 2008 how and how much amount of interest to be paid under section 234a/b/c for the companies?

Thanks with regards

CA SUBBIAH K (SENIOR MANAGER - F&A) (105 Points)
Replied 03 May 2009

Originally posted by :RAJBIR SINGH AHLAWAT
"	income tax for the year 2007-08 Rs.38445 of company and return file on 30th september 2008 how and how much amount of interest to be paid under section 234a/b/c for the companies? Thanks with regards	"

refer above calculations and substitute your amount of tax payable..

Rahul Poddar (CHARTERED ACCOUNTANTS) (998 Points)
Replied 29 September 2009

I am providing herewith the solution for Interes u/s 234A/234B/234C of Income Tax Act.

RAHUL PODDAR

Attached File : 30 interest.xlsx downloaded: 368 times

Rahul Poddar (CHARTERED ACCOUNTANTS) (998 Points)
Replied 04 October 2009

WHILE CALCULATING INTEREST U/S234 , THE TAX ON TOTAL INCOME IS THE BASE FIGURE FOR INTEREST CALCULATION . SO INTEREST THAT IS COMPUTED U/S234A OR ANY OTHER INTEREST WILL HAVE NO RELEVANCE WHILE COMPUTING OTHER INTEREST. IN MY FILE I HAD PROVIDED YOU WITH THE PROVISIONS OF INCOME TAX AS REGARDING INTEREST . GOING THROUGH THOSE PROVISION WILL CLESR YOUR CONCEPT FOR INTEREST. THE POINT TO BE NOTED IS THAT HEADS OF INCOME HAS NOTHING TO DO WHILE CALCULATING INTEREST U/S 234. ITS THE TAX ON TOTAL INCOME SDJUSTING TDS AND OTHERS WHILE CALCULATING INTEREST HOPE IT WOULD HELP YOU