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234A interest

mukesh (Student CA IPC / IPCC) (40 Points)

23 September 2019

Whether 234A interest needs to be calculated on tax payable including 234A also???

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Kapadia Pravin (17259 Points)
Replied 23 September 2019

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 . Tax is calculated on tax payable.

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Nimitha Kundanam (Senior Executive Accountant) (250 Points)
Replied 24 September 2019

It is not including 234A. only on tax liability amount.

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Suresh Thiyagarajan (Student) (3986 Points)
Replied 24 September 2019

1. Interest u/s 234A @ 1% will need to be payable on the Net tax liability payable after deduction of TDS and advance tax.
2. If your IT comes to Rs. 50,000 and you have a credit of Rs. 30,000 in TDS and Rs. 15,000 in advance tax, interest u/s 234A will need to be paid on the balance Rs. 5,000 @ 1% p.m for every month or part of a month from the due date for filing the ROI until the return is filed.
Please correct me if the above solution has an alternative view.