Interest for default in payment of Advance Tax- Section 234B - Income Tax - Ready Reckoner - Income Tax

Interest for default in payment of Advance Tax- Section 234B Chargeability: The assessee is liable to pay interest in the following cases:- Advance tax has not been paid by the asessee, or the advance tax paid by the assessee is less than 90% of the 'assessed tax' Note: Assessed Tax means Tax determined u/s 143(1) or an Assessment u/s 143(3) / 144 / 147 / 153A XX Less : Any relief of tax allowed under section 89 (XX) Relief of tax u/s 90 / 90A (XX) Relief of tax u/s 91 (XX) MAT credit u/s 115JAA (XX) AMT credit under section 115JD (XX) TDS/TCS (XX) Assessed Tax XX 2. Computation: Where No Tax has been paid after 31 st March of the Previous Year u/s 140A or otherwise Rate: 1% per month simple interest Period: commences from 1 st April of the assessment year and ends on: The date of determination of income u/s 143(1) And Where the assessment is made u/s 143(3) / 144 / 147 / 153A , the date of completion of such assessment. Note: Part of the month shall be considered ad full month Amount: Tax determined u/s 143(1) or on assessment under section 143(3)/ 144 / 147 / 153A XX Less: Relief of tax u/s 89 / 90 / 90A (XX) Relief of tax u/s 91 (XX) MAT Credit u/s 115JAA (XX) AMT credit under section 115JD (XX) TDS/TCS (XX) Advance Tax (XX) Amount on which Interest to calculate XX Where Tax has been paid after 31 st March of the Previous Year u/s 140A or Otherwise Interest shall be aggregate of (A+B) (A) (B) Rate: 1% per month Simple Interest Rate: 1% per month Simple Interest Period: commences from 1 st April of the assessment year and ends on the date of payment of tax under section 140A or otherwise. Period: commences from 1 st April of the assessment year and ends on: The date of determination of income u/s 143(1) And Where the assessment is made u/s 143(3)/ 144 / 147 / 153A , the date of completion of such assessment. Amount: Tax determined u/s 143(1) or on assessment under section 143(3)/ 144 / 147 / 153A XX Amount: Tax determined u/s 143(1) or on assessment under section 143(3)/ 144 / 147 / 153A XX Less: Relief of tax u/s 89 / 90 / 90A (XX) Less: Relief of tax u/s 89 / 90 / 90A (XX) Relief of tax u/s 91 (XX) Relief of tax u/s 91 (XX) MAT Credit u/s 115JAA (XX) MAT Credit u/s 115JAA (XX) AMT credit under section 115JD (XX) AMT credit under section 115JD (XX) TDS/TCS (XX) TDS/TCS (XX) Advance Tax (XX) Advance Tax (XX) Amount on which Interest to calculate XX Tax paid u/s 140A or otherwise (XX) Amount on which Interest to calculate XX Computation of Interest for payment u/s 140A Substitute the words Tax determined u/s 143(1) or on assessment u/s 143(3)/ 144 / 147 / 153A by the words tax on income declared in ROI . Substitute the words Date of determination of income u/s 143(1) and where assessment is made u/s 143(3)/ 144 / 147 / 153A , the date of completion of such assessment by the words Date of filing of ROI . Interest payable under this section shall be reduced by the interest, if any, paid u/s 140A or otherwise. In case where an assessee has failed to furnish ROI, then interest u/s 234B shall be applicable. For computing interest, Tax means Income Tax including surcharge Education Cess . Where as a result of an order made u/s 154 / 250 / 254 / 260A / 262 / 263 / 264 or order of settlement commission u/s 245D , the amount of Income Tax on which interest was payable under this section is reduced or increased, then the interest under this section shall also be reduced or increased correspondingly. Increase/Decrease in the interest on certain orders [ Section 234B(4) ] Where as a result an order, u/s 154 or or 250 or 254 or 260 or 262 or 263 or 264 or 245D(4) the amount of tax on which interest was payable u/s 234B(1) or (3) has been increased or reduced, as the case may be, the interest shall also be increased or reduced accordingly, and In a case where the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable and such notice of demand shall be deemed to be a notice under section 156 and the provision of this Act shall apply accordingly; In a case where the interest is reduced, the excess interest paid, if any, shall be refunded. Interest for defaults in payment of advance tax in case of re-assessment and where additional income is disclosed before the Settlement commission under section 245C [ Section 234B ] Interest under section 234B on additional amount if application is filed before Settlement Commission under section 245C(1) : Section 234(2A) The assessee shall be liable to pay simple interest @ of 1% for every month or part of the month comprised in the period commencing on the first day of April of such assessment year and ending on the date of making such application, on the additional amount refer to in that sub-section The order obtained by assessee from settlement commission u/s 245D(4) for any assessment year, the amount of total income disclosed in the applications u/s 245C(1) is increased, the assessee shall be liable to pay simple interest at the rate of 1% for every month or part of a month comprised in the period commencing on the 1 st day of April of such assessment year and ending on the date of such order, on the amount by which the tax on the total income determined on the basis of such order exceeds the tax on the total income disclosed in the application filed under section 245C(1). Where, as a result of an order under section 245D(6B) [relating to rectification of order of settlement Commission], the amount on which interest was payable has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly. the period for which the interest is to be computed will begin from the 1 st day of April next following the financial year and end on the date of determination total income under section 147 or section 153A .