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SECTION 234B(1)-INTEREST FOR DEFAULT IN PAYMENT OF ADVANCE TAX

Income Tax - Payment of Taxes and Interest - 9 - SECTION 234B(1) INTEREST FOR DEFAULT IN PAYMENT OF ADVANCE TAX CHARGEABILITY: Interest is payable if:- Advance tax paid by assessee during the previous year < 90% of the Assessed Tax OR No Advance tax is paid by the assessee. Note: Assessed Tax means Tax determined u/s 143(1) or an Assessment u/s 143(3)/144/147/153A XX Less: Relief of tax u/s 89/ 90/ 90A (-) XX Less: Relief of tax u/s 91 (-) XX Less: MAT credit u/s 115JAA (-) XX Less: AMT credi .....

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/s 143(1) or on assessment under section 143(3)/144/147/153A Less:Relief of tax u/s 89/90/90A Less:Relief of tax u/s 91 Less:MAT Credit u/s 115JAA Less:AMT credit under section 115JD Less:TDS/TCS Less:Advance Tax WHERE TAX HAS BEEN PAID AFTER 31st 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 1st April Period: Commences from the date next of the assessment .....

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of tax u/s 89/90/ Less: Relief of tax u/s 91 90A. Less: MAT Credit u/s 115JAA Less: Relief of tax u/s 91 Less: AMT Credit u/s 115JD Less: MAT Credit u/s 115JAA Less: TDS/TCS Less: AMT Credit u/s 115JD Less: Advance Tax Less: TDS/TCS Less: Tax paid u/s 140A or otherwise. Less: Advance Tax COMPUTATION OF INTEREST FOR PAYMENT UNDER SECTION 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 D .....

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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 155 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) .....

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. Some key amendment has been done by the Finance Act 2015 as follows: 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] [W.e.f. 1-6-2015]. Interest under section 234B on additional amount if application is filed before Settlement Commission under section 245C(1) [Section 234(2A) inserted w.e.f. 01.06.2015 and omission of section 245D(4) in section 234B(4)]. As per t .....

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as been amended by the finance Act 2015, in section 234B:- Sub-section 2A has been inserted in section 234B to provide for interest in case an application is made to settlement commission u/s 245(1) or order passed u/s 245D(4) is rectified u/s 245D(6B). Section 234B(2A) provides as under:- 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 m .....

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