Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Asked to pay penalty under 234b and 234c

natraj (Engineer) (28 Points)

04 August 2013

The bank has deducted tax @ 10% by means of TDS on interest on my fixed deposits. As I fall into 30% tax slab it is required to pay the remaining 20% tax

The numbers are like this: Total interest credited on my FDs is Rs 215884 and total TDS deducted by banks is Rs 21625. Dues to be paid now is 20% of 215884 = Rs 43176 plus education cess.

However in addition to that the quick file ITR section of the e-filing website shows I need to pay around Rs. 2250 under 234b and Rs. 1665 under 234c.

I dont understand this calculation, could you please help me at the earliest as tomorrow is the deadline for return filing?

Reply
Follow
Share

14 Replies

(Guest)

hi,234b is calculated for 4 months i.e. april to july @ 1 % on ur tax liability and 234c is applied in case of deferement of payment of advance tax in case your tax liability is more than 10,000.

Upgrade to CAclubindia Pro. Subscribe Now!

natraj (Engineer) (28 Points)
Replied 04 August 2013

Thanks for the reply.

Could you help understand how those numbers are arrived at (ex: Rs 2250)?

More details are here: My sources of income are salary & FD interest.

Tax on salary income has been paid by company = Rs .444454 (TDS)

Total FD interest is Rs 215884 & TDS deducted by banks is Rs: 21625.

Could you help me understand the calculations?

(Guest)

how much is ur salary?

(Guest)

i'll gv u the format.

income under the head salary

income from other sources=215884

total gross income= salary+215884

less deductions

net taxable income=total gross income-deductions

tax due

in ur case slabs to b applied r as follows

upto 200000-nil

next 300000-10%

next 500000-20%

balance -30%

add education cess @ 3%

total tax to b paid=after applying slab rate+cess-TDS(21625+444454)+interst U/S 234B and 234 C

and tds on fd shud b @ 10% of total interest i.e 21588,do u hv any other fd interest as well?

natraj (Engineer) (28 Points)
Replied 04 August 2013

Hi, i understand those details. i fail to understand why i have to pay under 234b and 234c as i am filing returns within the cut off time for this year.

Upgrade to CAclubindia Pro. Subscribe Now!

(Guest)

c u have to pay interest u/s 234b if u do not pay self assessment tax b4 april ,so u'll pay interst u/s 234b for 4 months i.e. april-july @ 1%, secondly in case of individual if tax liability is more than 10,000 then he/she has to pay advance tax in installments i.e 30% of tax liability on 15th september ,60% on 15th december100% on 15th march and if he/she does not pay advance tax or he/she has short paid then he/she has to pay interset u/s 234C,which further requires calculations.

(Guest)

234B & 234C are not related wid timely filling of return,they relate to timely payment of self assessment tax.

natraj (Engineer) (28 Points)
Replied 04 August 2013

Thanks Ashima for your time and answers, I shall go ahead and pay the taxes as shown by e-filing site.

However I would like to avoid this mistake next year and would like to pay the self assessment tax on dates mentioned. But is it a guess work to calculate how much self assessment tax i have to pay as i would not know exactly how much interest earning will be there by the financial year end, could you point me to some link in internet and provide the data that can help me understand this? Thanks again in advance,

(Guest)

hmm ..well i m not aware of any such site on internet,but c as and when tds gets deducted from fd interest as well as amount of interest, it will show up in 26AS which u can download from income tax site from where u upload ur return and keep a track on interest amount and calculate ur tax accordingly.

natraj (Engineer) (28 Points)
Replied 04 August 2013

Another interesting thing is if I enter my income from other sources as 100000 instead of the 215884, then 234b & 234c show 0 Rs to pay. How do we explain this? :)

Upgrade to CAclubindia Pro. Subscribe Now!

(Guest)

well strange then no explaination for that ............. :)...........then may b itr is defective.

(Guest)

Mr.nataraj , take the help of tax consultant ..why trying to use ur smartness??? is to prove otherd that u have filed the return on ur own?.

(Guest)

Originally posted by : natraj
	Another interesting thing is if I enter my income from other sources as 100000 instead of the 215884, then 234b & 234c show 0 Rs to pay. How do we explain this? :)

REASON INCOME TAX PAYABLE ON OTHER INCOME LESS THAN 10000 SO INTEREST U/S 234B / 234C NOT APPLICABLE. U CAN SAVE INTEREST U/S 234B IF U PAY 90% OF ADVANCE TAX ON OR BEFORE 31ST MARCH.ANY OTHER QUESTION CHECK LINK BELOW.

INCOME TAX ACT -1961 CONCEPTS ADVANCE TAX , SECTIONS 234A , SEC 234B , SEC 234C - COMPUTATION OF INTEREST LIABILITY ON INCOME TAX PAYABLE WITH EXAMPLE

https://www.chdcaprofessionals.com/2013/06/advancetax-sec234a-sec234b-sec234c.html