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Section 234 interest added to ITR.

ITR Filing 250 views 1 replies

Rahul

57 Points Posted on 17 September 2020

Hi All,

I'm working as a software engineer in an IT company.
I'm filing ITR form-1 for FY 2019-20.

My company had deducted and submitted TDS of around Rs 7000 on 6/01/2020 to Govt. IT department.
Now, initially while filing the ITR, my tax payable was coming as Rs 0.
After adding interest from saving account, my taxable salary became more than 5 lakh.

Now, it's showing tax payable according to the slab(Rs 12500 + 20% of amount above 5 lakh).

This is fine.

However, it's also adding a total of around Rs 4000 interest against below sections:
Interest u/s 234B
Interest u/s 234C

As per my understanding, salaried professionals shouldn't be considered for advance tax.
Is my understanding correct?

If yes, then why the section 234 interest amount is added?
If no, then how could I have avoided it?

Any responses are appreciated!

Thanks
Rahul

Replies (1)

CA Sunil Kumar

Chartered Accountant

4524 Points Posted on 17 September 2020

Yes salaried employees have no obligation to make payment of advance tax but this is true only as far as salary income is concerned. If salaried employees have income from various other sources other than salary income. The advance tax is definitely payable even by salaried employees on their other income.
1) In your case, since you have income from other sources, that's why system is calculating interest u/s 234B and 234C.
2) you can also claim deduction upto 10000/- u/s 80TTA on saving bank interest