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How To Calculate Interest U

1. The document discusses the due dates for filing income tax and wealth tax returns, which vary based on whether the taxpayer is an individual or a company. It also outlines the consequences of late filing such as interest charges and penalties. 2. It explains how interest is calculated under sections 234A, 234B, and 234C of the Income Tax Act for late or non-filing of returns, short payment of advance tax, and deferment of advance tax payments. 3. Penal interest of 1% per month is charged for late filing of wealth tax returns as well.

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37 views3 pages

How To Calculate Interest U

1. The document discusses the due dates for filing income tax and wealth tax returns, which vary based on whether the taxpayer is an individual or a company. It also outlines the consequences of late filing such as interest charges and penalties. 2. It explains how interest is calculated under sections 234A, 234B, and 234C of the Income Tax Act for late or non-filing of returns, short payment of advance tax, and deferment of advance tax payments. 3. Penal interest of 1% per month is charged for late filing of wealth tax returns as well.

Uploaded by

Abhishek
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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How to Calculate Interest U/s.

234A, 234B, 234C


WHAT ARE THE DUE DATES FOR FILING OF RETURNS?
The Due dates for filing Income Tax returns are:1. Where the assessee is a Company 30th September of the Assessment Year.
2. Where the assessee is a person other than a company:a) where accounts of the assessee are to be Audited or a working partner of a firm whose accounts are
required to be audited under the Income Tax Act or any other law 30th September of the Assessment Year.
b) Any other assessee 31st July of the Assessment Year.
CONSEQUENCES OF SUBMISSION OF RETURN AFTER DUE DATE
If a return is submitted after the due date, the following consequences will be applicable:
1. The assessee will be liable for penal interest under section 234A.
2. A penalty of Rs 5,000 may be imposed under section 271F if belated return is submitted after the end of the
assessment year.
3. If the return of loss is submitted after the due date, a few losses cannot be carried forward.
4. If the return is submitted belated, deductions allowable under certain sections will not be available.
INTEREST U/S. 234-A FOR LATE
OR NON-FURNISHING
OF INCOME TAX RETURN
For defaults in furnishing Return of Simple interest @ 1% for every month or Part
income
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. The
interest is calculated on the amount of the tax
on the total assessed income as determined
under sub-section (1) of section 143 or on
regular assessment u/s 143(3) as reduced by
the Advance Tax, if any, paid and any tax
deducted or collected at source.
IF AN ASSESSEE DOES NOT FILE HIS RETURN OF INCOME, IS ANY PENALTY IMPOSABLE UPON HIM?
Yes, Penalty of Rs. 5000 is imposable for non-filing of return within the assessment year. Interest is also chargeable
for non-filing or late filing, as shown above.
IS TAX TO BE PAID DURING THE FINANCIAL YEAR ON THE BASIS OF PAY AS YOU EARN?
Yes, Such payments have to be made in installments and are known as Advance-Tax payments. However the liability
for payment of advance tax arises only where the amount of such tax payable by the assessee during that year is Rs.
5,000 or more.
The due dates and the percentage of installments of Advance Tax for assessees other than Companies are as
below :Due Date of installments

Amount payable

1st on or before 15th September.

Amount not less than 30% of such


advance tax.

2nd on or before 15th December.

Amount not less than 60% of such


advance tax after deducting amount paid
in earlier installment.

3rd on or before 15th March.

Entire balance amount of such advance


tax.

In case of companies, there are 4 installments of advance tax payable on or before 15th June (15%); 15th Sept.
(45%); 15th Dec. (75%); & balance amount of Advance Tax payable by 15th March. Also, any amount paid by way of
Advance Tax on or before the 31st March of that year, is treated as Advance Tax Paid during that Financial Year. The

percentages of 45% and 75% specified with reference to dates of 15th Sept. and 15th Dec. include the amount of
advance tax paid earlier during the year.
IF THE TAX PAYER FAILS TO PAY 90% TAX PLUS APPLICABLE INTEREST THEN HOW IS INTEREST FOR
SHORT PAYMENT OF SUCH ADVANCE-TAX CALCULATED?
INTEREST U/S. 234-B FOR SHORT PAYMENT OF ADVANCE
TAX
Simple interest @ 1% for month or part thereof
is chargeable w.e.f. 1st April of the Assessment
Year to the date of determination of income
Shortfall in payment of Advance tax of u/s.
143(1) or regular assessment u/s
more than 10%.
143(3) on the assessed tax.
Assessed tax means the tax on the total
income determined under sub section (1) of
section No. 143 or on regular assessment u/s
143(3), as reduced by the amount of tax
deducted or collected at source.
HOW IS INTEREST FOR DEFERMENT OF ADVANCE-TAX CALCULATED?
(A) INTEREST U/S. 234-C FOR DEFERMENT OF ADVANCE
TAX (Non Corporate assessees)
1. If no advance tax is paid or the advance tax
paid in 1st installment on or before 15th
September is less than 30% of the tax payable
on the returned income as reduced by taxes
deducted at source.

Simple interest @ 1% p.m. is


chargeable on the amount of
shortfall for a period of 3 months.

2. If no advance tax is paid or if the advance tax


paid in 2nd installment on or before 15th
Simple interest @ 1% p.m. is
December is less than 60% inclusive of 1st
chargeable on the amount of
installment of the tax payable on the returned
shortfall for a period of 3 months.
income as reduced by taxes deducted at source.
3. If the advance tax paid on the current
Simple interest @ 1% is chargeable
th
income on or before the 15 day of March is less on the amount of shortfall from the
than the tax due on the returned income.
tax due on the returned income.
B. INTEREST U/S 234C FOR THE CORPORATE ASSESSEES
1. If advance tax paid on or before June 15th is
less than 12%.

Simple interest @ 1% p.m. is


chargeable on the amount of
shortfall for a period of three
months.

2. If advance tax paid on or before Sept. 15th is


less than 36%.

Simple interest @ 1% p.m. is


chargeable on the amount of
shortfall for a period of three
months.

3. If advance tax paid on or before Dec., 15th is


less than 75%.

Simple interest @ 1% p.m. is


chargeable on the amount of
shortfall for a period of three
months.

If advance tax paid on or before March 15th is


less than tax due on returned income (100%).

Simple interest @ 1% is chargeable


on the amount of shortfall from the
tax due on the returned income.

However, no interest is leviable if the short fall in payment of advance-tax is on account of under estimation or failure
to estimate the amount of capital gains or any income from winnings from lotteries, crossword puzzles, races, and
other games including an entertainment program on television or electronic mode, in which people compete to

win prizes etc., and the assessee has paid the tax on such income as part of the remaining instalments of advance tax
which are due or if no instalment is due, by 31st March, of the Financial Year.
WHAT ARE THE DUE DATES FOR FILING OF WEALTH TAX RETURNS?
The due dates for filing Wealth Tax returns by different assessees, are the same as that given above for filing Income
Tax returns.
WHAT ARE THE CONSEQUENCES OF NOT FILING OR LATE FILING OF WEALTH TAX RETURNS?
Where the assessee had defaulted in timely furnishing of his return of wealth, then penal interest @ 1% for every
month or part of a month of delay is chargeable for Non/Late filing of return.
- See more at: http://taxguru.in/income-tax/calculate-interest-234a-234b-234c-return-due-date-consequences-latefiling.html#sthash.UdKew8vB.dpuf

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