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Section 234F

17 June 2020

when we calculate the Interest under S234A for late return filing in that case we have to calculate it on tax amount or on tax plus fees u/s234F
for eg-
tax amount -50000
234F fees- 5000
than interest will be on-
a) 50000 or
b) 55000
I referred Vinod Gupta sir book he is calculating on 55000 but I am doubtful about that
so can u please suggest me what should I do in exam?

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6 Replies

Vishal Sirohiwala (24 Points)
Replied 18 June 2020

It should be levied on tax payable according to me.

1 Like

Mohan Kale (393 Points)
Replied 18 June 2020

To be calculated only on tax amount, the reason being charges under 234F are in the nature of fee for late filing of return and it is not component of income tax.

2 Like

Eswar Reddy S (CFO- at NHTF) (58275 Points)
Replied 20 June 2020

It is important to note here that the provisions of section 234F of the Income Tax Act is effective only from the Assessment Year commencing from 1st April 2018.

It is also pertinent to note that the late fee under section 234F was introduced with an aim to ensure timely filing of the income tax return.

1 Like

shiza khan (20 Points)
Replied 20 June 2020

@ swear reddy s..what is the final ans of above query as per u?

Bhavin Shah (Chartered Accountant) (821 Points)
Replied 21 June 2020

Only on tax payable (gross liability - tds - advance tax)
Section 234F is a fee levied for late filing of return (its in the nature of a penalty)

Eswar Reddy S (CFO- at NHTF) (58275 Points)
Replied 17 September 2020

@ shiza khan,

You can't calculate 234A on 234F interest.

First calculate tax then 234A ,234B & 234C.You just need need to add 1000/5000 directly to tax liability+interest+cess.

I mean to say cess is not applicable 234F