When 234B & 234C is applicable?

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.

How do you calculate 234B and 234C?

Also he must pay 90% of advance tax before 31st March to comply with the provision of section 234B. Say, he paid Rs….Interest on defaults in payment of Advance tax – Section 234B of the Act.

DUE DATE OF INSTALLMENTS	AMOUNT PAYABLE
On or before 15th December	75% of advance tax
On or before 15th March	100% of advance tax

What is interest u/s 234B & 234C?

Under this Section, interest is charged at 1 % on the outstanding tax amount and must be paid from the first day after the due date of filing the return until the date of the actual filing of the return.

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 234B applicable for senior citizens?

As per section 234B, interest at 1% per month or part of a month is levied if assesse has paid less than 90% of the advance tax. 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 do you calculate 234C?

This penal interest u/s 234B is calculated separately from interest levied under section 234C….Interest Calculation Under Section 234C.

Date of Payment	Total Amount (Rs.)
On or Before 15th June	10750
On or Before 15th September	15000
On or Before 15th December	25000
On or Before 15th March	40,000

Is 234A applicable for extended due date?

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.

Is 234A applicable if due date is extended?

As per the Clarification 1 appended to the Circular, it has been clarified that the extension of the due date shall not be applicable in respect of provision of section 234A.

What is interest under 234B?

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.

What is Section 234A?

Interest under section 234A is levied for delay in filing the return of income. Interest 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 delay in filing the return of income.