234a interest

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Pradeep (Querist)
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29 February 2016 Dear Professional Colleagues .,

I Have a doubt about 234A interest regarding

If total tax liability amount is 5,000/- and I am getting 234A interest amount is 6000/- (5000*1%*120months)
Is 234A interest can exceed the Tax Liability??

How much amount I have to pay to Income tax

Please clarify me

Thank You

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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29 February 2016 Section 234A is levied for delayed filing of IT Return. Interest is charged on the tax remaining unpaid @ 1% per month or part thereof for the delayed period.

My knowledge of Section 139 of the I.T.Act 1961, allows a return to be filed only for a period of two years from the beginning of the Assessment Year i.e the return for Assessment Year 2014 - 15 can be filed only upto 31st March 2016, i.e. a delay of 18 or 21 months depending on whether the due date for filing was 30th September 2014 or 31st July 2014.

Even if the Return is filed in response to a notice u/s 147, the re-opening would have been done within 24 months plus one month for filing an additional 25 months or a total of 46 months.

120 months means a period of 10 years and as of today there is no provision for filing IT return after 10 years delay. Therefore, there apparently is a mistake either in your question or in the period of delay.

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Pradeep

Pradeep (Querist)
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02 March 2016 Sir.,
My Querry is that, whether the Total Interest amount u/s 234A,B & C can exceed the tax liability amount for the year??. If not, what is the provision applicable??
Thank you..

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Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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02 March 2016 Yes the interest is chargeable as per the provisions. There is no clause in any of the sections saying the interest should not exceed the amount of tax payable as is clearly mentioned in sectioned 234 E w.r.t. late filing of TDS Returns. Therefore, there may be situations where due to application of the provisions of section 234 B the interest amount can exceed the tax payable. If only sections 234 A & C is applicable such a situation would not arise.

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