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Interest u/s 234b and 234c

MAULIK GANDHI (Tax Assistant) (221 Points)

22 January 2015

Dear Friends & Seniors,

If Assessee is senior citizen only having income from other sources but assessee has filed ITR 4 due to brought forward speculation losses from AY 2013-14, so is that assessee is liable to pay interest u/s 234B & 234C?

Thanks in Advance

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12 Replies

Nraju (Vacant) (65 Points)
Replied 22 January 2015

Yes, he is liable to pay interest u/s.234B & 234C, if he is liable to pay advance tax.

Akhil Sharma (Service) (141 Points)
Replied 22 January 2015

Dear Maulik,

As long as the taxable income of the assessee after setting off the speculation lossess is such that the tax on the same is more than Rs.5000, he will be liable to pay interest u/s 234B in case there has been a default in the payment of advance tax & 234C in case there is deferment in the payment of the advance tax.

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MAULIK GANDHI (Tax Assistant) (221 Points)
Replied 22 January 2015

Originally posted by : Akhil Sharma
	Dear Maulik, As long as the taxable income of the assessee after setting off the speculation lossess is such that the tax on the same is more than Rs.5000, he will be liable to pay interest u/s 234B in case there has been a default in the payment of advance tax & 234C in case there is deferment in the payment of the advance tax.

Thanks Akhil but can you give me some ref section or case, I m asking you becoz there is no such word is witten in section 207 of IT Act. In section 207 it is only stated 3 condition

1. Assessee should be Ordinary Residen

2. Assessee age should be above 60 years in previous year

3. should not have business & profession Income

There is no mentioning for Brought forward loss from Speculation (which is part of business & profession Income)

Raphael (Chartered Accountant) (214 Points)
Replied 22 January 2015

Dear Friend,

As per Sec 207(2),

(1) Tax shall be payable in advance during any financial year, in accordance with the provisions of sections 208 to 219 (both inclusive), in respect of the total income of the assessee which would be chargeable to tax for the assessment year immediately following that financial year, such income being hereafter in this Chapter referred to as "current income" 94.

(2) The provisions of sub-section (1) shall not apply to an individual resident in India, who—

(a) does not have any income chargeable under the head "Profits and gains of business or profession" ; and

(b) is of the age of sixty years or more at any time during the previous year.

So in your case, if the assesee does not have any income chargeable under the head business/profession, he is not required to pay advance tax and hence 234B & C will not apply. But 234A will apply in case of delay in filing return. So filing ITR 4 is not the criteria but the facts whether he has any income under the head business or profession.

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MAULIK GANDHI (Tax Assistant) (221 Points)
Replied 22 January 2015

Originally posted by : Raphael
	Dear Friend, As per Sec 207(2), (1) Tax shall be payable in advance during any financial year, in accordance with the provisions of sections 208 to 219 (both inclusive), in respect of the total income of the assessee which would be chargeable to tax for the assessment year immediately following that financial year, such income being hereafter in this Chapter referred to as "current income" 94. (2) The provisions of sub-section (1) shall not apply to an individual resident in India, who— (a) does not have any income chargeable under the head "Profits and gains of business or profession" ; and (b) is of the age of sixty years or more at any time during the previous year. So in your case, if the assesee does not have any income chargeable under the head business/profession, he is not required to pay advance tax and hence 234B & C will not apply. But 234A will apply in case of delay in filing return. So filing ITR 4 is not the criteria but the facts whether he has any income under the head business or profession.

Dear Sir,

Assessee dont have any income chargable under the head business & profession in AY 2014-15. in AY 2014-15 assessee has only income chargable under the head of Income from other sources. but the assessee has speculation loss which is carried out from AY 2013-14. so is assesse is liable to pay interest u/s 234B & C. 234A is not applicable becoz assessee has submitted return before 31st of july. i m asking you becoz assessee has received 143(1) intimation in which CPC has charges Interest u/s 234B & C. in my opinion it is not liable to pay interest u/s 234B&C. but i want expert suggestion is my opinion is right or wrong

Raphael (Chartered Accountant) (214 Points)
Replied 22 January 2015

My understanding of your explanation is that the assesse does not have income from business/profession. He has filed ITR4 as there is carry forward of loss from speculation business, but no speculation business was carried during the year.

If this is the situation then my opinion is that 234B & C will not apply. The section is specific about current income. Hence non-allowance of the provisions of the section by means of carry forward income will violate the purpose of the section. You should consider re-submitting the return using the efiling portal.

1 Like

CA Girish Patwa (Proprietor ) (26 Points)
Replied 22 January 2015

Section 234b and c will not apply in your case

1 Like

Nandeesh V (Article Assistant) (23 Points)
Replied 07 December 2015

Please help me for the following issue.

my client having HP income and interest income from india but he is a non resident and he is also senior citizen. for this whether interest u/s 234B and C applicable?

Nandeesh V (Article Assistant) (23 Points)
Replied 07 December 2015

Please help me for the following issue.

my client having HP income and interest income from india but he is a non resident and he is also senior citizen. for this whether interest u/s 234B and C applicable?

Nandeesh V (Article Assistant) (23 Points)
Replied 07 December 2015

Please help me for the following issue.

my client having HP income and interest income from india but he is a non resident and he is also senior citizen. for this whether interest u/s 234B and C applicable?

Ketan Kapoor (Audit) (124 Points)
Replied 07 December 2015

@ MAULIK: Provisions u/s 234B & C would not apply on your client, as per clear reading of the said sections, since advance tax provions do not apply to individual resident senior citizens who do not have income chargeable under the hear PGBP as persion 207(2).

@ NANDEESH: The above answer applies to you as well. Since your client is a non resident, the said provision of section 207(2) does not apply on him, and he would have to pay interest u/s 234 B & C.

Ruchi (CA) (1410 Points)
Replied 08 December 2015

The exemption from Payment of advance tax is available only to individuals resident in India. Hence, interest is applicable in your case and it must be paid.