# What is Section 234A 234B 234C?

Sep 25, 2019

## What is Section 234A 234B 234C?

Under section 234B, interest for default in payment of advance tax is levied at 1% per month or part of a month. The nature of interest is simple interest. In other words, the taxpayer is liable to pay simple interest at 1% per month or part of a month for default in payment of advance tax.

How is 234A calculated?

You will be charged an interest amount of 1% per month or part of the month (simple interest) on the tax amount outstanding. This interest will be calculated from the due date applicable to you for filing of return of the relevant financial year till the date that you actually file your return.

### Is interest us 234A applicable for AY 2020 21?

2020-21. Any assessee who has tax payable and don’t file his/her Income Tax Return within the due date specified u/s 139(1) is liable to pay interest u/s 234A.

What is difference between 234A 234B 234C?

Under Section 234B, the taxpayer must pay at least 90% of the tax that is due to be paid at the end of the financial year. The taxpayer has the provision to pay his tax in the form of 4 instalments. Under Section 234C, a penalty is imposed if the tax payment is delayed.

## When 234B & 234C is applicable?

Interest under section 234B is applicable when: Your tax liability after reducing TDS for the financial year is more than Rs 10,000 and you did not pay any advance tax.

What is the penalty for not paying advance tax?

Interest under Section 234B is levied if the taxpayer has not deposited advance tax or if the advance tax deposited is less than 90% of the total tax liability. The taxpayer will be liable for interest under Section 234B at 1% per month or part of the month from April till the date of payment of tax.

### What is 234A interest in income tax?

1% per month
Section 234A of the income tax act provides for levy of interest against delay in filing the income tax return. The applicable interest rate is 1% per month or part of the month on the amount of tax payable by the taxpayer.

How do you calculate interest 234A 234B & 234C with example?

Solution: According to section 234B mentioned above, interest @ 1% will be calculated on the taxes due for a period of 4 months (April, May, June & July), considering July as a full month. Interest liability of Mr. Sachin is – (₹ 84790 – ₹ 70000 = ₹ 14790). Thus, interest payable u/s 234B will be ₹ 592.

## Who is responsible for advance tax in India?

As per section 208 of the Income Tax Act 1961, every person whose estimated tax liability for the year is more than or equal to `10,000 is liable to pay advance tax. Those who are excluded from paying advance tax are senior citizens who are above the age of 60, not having any income from business or profession.