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Interest under section 234A for Assessment year 2020-21

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yash lakhani

21 Points Posted on 26 March 2021

Dear Members,

Please revert to this Query

Query: As per the notifications issued by CBDT for A.Y.2020-21, No penalty/interest u/s 234A has to be paid in case Tax liablity is upto Rs.One Lakh. In view of the above kindly ans for fllowing case:

Gross Tax Liability : One Lakh Fifty one thousand

Lumpsum Tax Self Assessment Tax deposited on 30/11/2020 : One Lakh (before filing of return)

Net Liability while filing return : Fifty one Thousand

Tax liabilty of Fidty One Thousand paid on 30/12/2020

Return Filed: 03/01/2021

Kindly guide me on Interest to be charged u/s 234A in the above case alongwith some explanation.

Regards,

Replies (3)

Quick Summary

This discussion clarifies the applicability of Section 234A interest for the Assessment Year 2020-21, particularly when the gross tax liability exceeds £1 lakh. Despite CBDT notifications exempting interest for liabilities up to £1 lakh, the consensus is that interest under Section 234A is attracted if the total tax liability is greater than this threshold. The specific case involves a gross liability of £151,000, with part paid before filing and the remainder paid after the return filing date, leading to a discussion on whether interest is due.