Query about sec interest u/s 234A,B andC

How did u file your return because time has over for that A.Y. ?

Dear Pankaj

A belated return could be filed till one year from the end of relevant Assessment year,

in above case A.Y. 2008-09 i.e. last date of filing is 31/03/2010.

Intt u/s 234A is a penal intt for delay in filing of ROI. Amount of Tax on which such intt is caclculated is

Tax Due - (MAT Credit+TDS/TCS+Advance Tax+Self Assessment Tax paid b'fore due date)

So in present case, no intt will be charged u/s 234A.

Intt u/s 234B is a compensatory intt which is charged when Advance Tax paid is less than 90% of Tax Due. So in present case, as no Advance Tax is paid, intt u/s 234B shall be charged.

Intt u/s 234C is chargeable for defferrement of Advance Tax. As no Advance Tax is paid by Assessee, intt u/s 234C shall be applicable.

 Section 234A applies when the return of income is not filed within the due date u/s 139(1) or within the time allowed by the notice u/s 142(1), or if the return of income is not furnished.

Ms. Nitu Agarwal

Thanks for Sharing your view.

Int u/s 234B  & 234C shall be charged when Advance Tax is not paid but in the case above Advance tax is paid Rs.25,000/- on 06/05/2008.

Kindly reply

Nitu Agarwal

As per the provisions of the act if return is not filed within the due date or not furnished interest u/s 234A will be applicable

Dear Saliq Ansari

Your a.y is 2008-2009 i.e financial year 2007-2008 so advance tax has to be paid before 31st march 2008 and not after 31st march 2008

Thanks

Hitesh Agarwal

But in the case above interest u/s 234A will be payable on (tax payable less TDS,TCS and advance tax paid) i.e. 24776-25000 = -224

now will there be interest u/s 234A

You are correct that interest is payable on amount of tax less tds, tcs and advance tax but advance tax has to be paid before 31st march 2008 and not after 31st march 2008. your financial year is 2007-2008

Thanks

Hitesh Agarwal

and would interest u/s 234B & 234C will be applicable or not

Interest u/s 234B is applicable when the assessee fails to pay advance tax or advance tax paid by the assessee is less than 90% of the assessed tax. In the present case no advance tax has been paid so interest will be applicable. 

Regarding 234C where the assessee fails to pay any instalment of advance tax or pays less amount than prescribed he will be liable to pay interest u/s 234C. So interest is applicable

All income tax sections...

in a suitable pdf file for quick revision

dear saliq,

intrest under 234A  though applicable on calculation will come nil, as payable amt is already paid before the due date 31/07/2008

int under 234B for not paying adv tax will be appl as 24776*1%*2mnths=495.52

int under 234C  for defferment in adv tax

1st inst   24776*30%*1%*3mnths=223

2ndinst  24776*60%*1%*3mnths=446

3rdinst   24776*1%*1mnth=247

Interest u/s 234A is in the nature of compensation and not in the nature of penalty. Hence where the tax as per the returned income is paid before the due date of filing of return on income, no interest u/s 234A leviable, even if return not filed before due date. (CIT Vs Pranoy Roy, 254 ITR 755(Del,), CIT Vs India Meters LTD(2009) 309 ITR 231 (SC). So no interest will be leviable u/s 234A