What is Section 234A of Income Tax Act?
Interest for
Section 234A: Interest for defaults in furnishing return of income. The interest levied for delay in filing the return of income comes under section 234A of the Income Tax Act. If the taxpayer files their income tax return after the due date specified by the authorities, an interest under this section will be levied.
How is interest 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.
What is 234A 234B and 234C?
Advance tax is usually payable when your tax liability exceeds Rs. 10,000 in a financial year. However, if you forget or delay the payment, you are penalized in the form of interest under section 234B of the Income Tax Act. You also must pay similar penalties under section 234A and 234C.
Is 234A applicable to senior citizens?
c) Taxpayers greater than 60 years i.e. resident senior citizens not having business or professional incomes are exempted from payment of advance tax.
How is 234B calculated?
Interest calculation Rs 14,300(assessed tax, fraction of 100 ignored) – Rs 5000(Advance Tax) = Rs 9300 Rs 9300 x 1% x 4 months (April, May, June, July) = Rs 372 Rs 372 is the interest payable under section 234B by Rohit.
Why is there interest under Section 234B?
If you have to pay Rs 10,000 or more in taxes in a financial year, advance tax may be applicable to you. Advance Tax means paying your tax dues on the due dates provided by the income tax department. If you don’t pay advance tax on time or default completely, you may be liable to pay interest under section 234B.
How is income tax interest 234A 234B 234C calculated?
3. INTEREST UNDER SECTION 234A FOR LATE OR NON-FURNISHING OF INCOME TAX RETURN. Simple interest @ 1% for every month or Part thereof from the due date of filing of the Return to the date of furnishing of the return & in case return is not filed, it is upto the date of completion of assessment u/s 144.
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.
Is 234B applicable for salaried employees?
If you don’t pay advance tax, you may be liable to pay interest under Section 234B. All assesses including salaried employees, freelancers, businessmen etc. are required to pay advance tax where the tax payable is ₹ 10,000 or more. In any one of the cases interest under Section 234B shall be applicable.
Is 234A applicable if due date is extended?
As per the clarification appended to the Circular extending the dates for filing tax returns, it has been clarified that the extension of the due date shall not be applicable in respect of provision of section 234A. …
How does section 234A of the Income Tax Act work?
It is always in the best interest of the taxpayer to fulfill all their tax-related commitments before the due dates. 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.
When do you have to pay interest under 234A?
If you are late in filing an Income Tax Return, you will be liable to pay a penalty under Section 234A. The due date of submitting your tax return is on or before 31st July of a financial year. If you miss to submit it by the stipulated timeline, you will have to pay interest at 1% per month on the outstanding tax amount.
When is penal interest charged under section 234A?
In case you have not filed your ITR on the due date but you are eligible to claim a tax refund, then the penal interest charged under section 234A will be levied only on net tax amount outstanding after adjusting the tax refund.
When is Gauri due to pay tax under 234A?
This went on to accumulate her total outstanding tax for the financial year at Rs. 5 lakhs under Section 234a for AY 2020-21. After getting her outstanding salary, Gauri rushed to pay her tax on 31st March 2019, which she was supposed to pay on 31st July 2018. She is late for 8 months.