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Section 234A is applicable if Tax due for deposit?

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D.K. Sharma

39 Points Posted on 12 September 2021

dear Sir,

we have partnership firm under tax audit. If we will file return on 20th dec 2021 and tax also deposit of Rs. 50 lac.

At thay condition we are liable to pa
y interest under section 234A ? for 3 month on 50 lac .

thanks
D.K. Sharma

Replies (2)

Quick Summary

This discussion clarifies the applicability of Section 234A interest for partnership firms. Interest is charged at 1% per month if the self-assessment tax liability exceeds £1 lakh. If your tax due is over this amount, filing your return and depositing the tax by the original due date is crucial to avoid interest charges.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

212441 Points Posted on 13 September 2021

Yes. The relaxation with respect to Interest u/s 234A which is charged @ 1 per cent per month for every month or part of a month thereof after the original due date of filing ITR of the IT Act is available in case the self assessment tax liability (after providing for TDS, advance tax, etc.) does not exceed Rs 1 lakh.

Accordingly, no relief with respect to Section 234A has been provided where the self assessment tax liability exceeds Rs 1 lakh.

Thus, it becomes important for taxpayers whose self assessment tax liability exceeds Rs 1 lakh to pay the tax dues to file their returns before the original due date to avoid levying of interest u/s 234A,