Interest payable by assessee under section 234(A), (B), (C)

Under section 234(A)

For default in filing income tax return:

If assessee fails to file or submit his income tax return by due date, then he is liable to pay interest under section 234(A) as under:

Tax on income declared in return XXXX
TDS XXXX
Advance tax XXXX
Self assessment tax XXXX

 

Period for which interest is payable:

Interest under section 234(B) is payable for period starting from date immediately after due date for filing income tax return and ending on the date on which income tax return is filed.

Rate of Investment – Simple interest at 1% per month or part of the month is payable.

Note: For calculations of interest under section 234(A) and 234(B) is to be assumed that entire self assessment tax is paid on the date of filing income tax return and date of payment of Self assessment tax is the same.

Interest under section 234(B)

For default in payment of total advance tax:

If assessee who is liable to pay advance tax has interest paid on advance tax paid on total advance tax paid is less than 90% of advance tax payable during the financial year, then he is liable to pay interest under section 234(B).

Rate of investment – same as under section 234(A)

Amount on which interest is payable – same as under section 234(A)

Period for which interest under section 234(B) is payable

Interest under 234(B) is payable for period starting from 1st month of assessment year till the date of payment of self assessment tax. It is assumed that date of payment of self assessment tax is same as the date of filing of income tax return.

Interest under section 234(C)

For nonpayment or short payment of installments of advance tax.

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