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Interest u/s 234B and 234C for Individual taxpayer

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Harshavardhana

23 Points Posted on 07 November 2021

I am a salaried individual and my company has paid tax on my behalf. I have interest income from FD for which the tax liability is around Rs.10,000/-. This is less than 10% of my total tax liability. Meaning, I have paid more than 90% of total tax payable.

While filing ITR for AY 2021-22, income tax portal is asking me to pay interest u/s 234B and 234C
I have read few articles which says interest u/s 234B and 234C is when total tax paid before 31st March 2021 is less than 90%

Also, If I change interest income such that tax liability is less than Rs.10,000/-, say Rs.9000/-, interest u/s 234B and 234C disappears from portal

I would like to know where am I going wrong here. Am I supposed to pay interest u/s 234B and 234C?

Replies (3)

Quick Summary

This discussion clarifies the applicability of interest under sections 234B and 234C for individual taxpayers. The user, a salaried individual, is being asked to pay interest despite their company handling most of their tax and their interest income tax being less than 10% of the total liability. The key point is that while paying over 90% of total tax is generally a threshold, interest may still apply if the remaining tax due before March 31st is significant, unless the final tax liability is below £10,000.

CA Raj Doshi

Practising CA

5649 Points Posted on 07 November 2021

If the tax liability is more than Rs. 10000 then interest applicable. If the tax liability is upto Rs. 10000 then interest not applicable.

Harshavardhana

23 Points Posted on 07 November 2021

But I have paid more than 90% of my total tax liability for FY2020-21.

CA Jaspreet Kaur

Practice

130 Points Posted on 07 November 2021

You have to pay 100 percent tax before March 15 otherwise interest is applicable, but if remaining tax is less than 10000 then interest is not applicable