Common Mistakes Interest Calculation 234A 234B 234C

CA Ayush Agarwal (Kolkata-Pune-Mumbai) (27186 Points)

24 March 2010  

Income Tax department recently issued List of Common mistake while processing the e filled Returns for Assessment year 2009-10 and Assessment Year 2008-09.I have listed the errors in various Topics .In this post We have listed the common errors Noticed in calculation of Interest calculation under











  • 234 A -Return is Filled Beyond Due date and tax is payable or paid after due date.
  • 234 B-Short fall in payment of Advance Tax
  • 234 C-Deferment of advance Tax   

 

Reasons for difference in calculation of Tax or Interest under 234A, B or C and Interest on Refund.







There may be a difference in calculation of tax or interest due to the following reasons:







  • Mistakes in computation of Income , leading to an increase in Income.

  • Mistake in correctly entering data or code of Income chargeable to tax at special rates such as STCG on sale of shares, LTCG where indexation benefit is claimed, winnings from lottery.

  • Incorrectly computing special rates of tax 

  • Mistakes in entering or leaving blank, important fields relevant for computation of tax such as date of birth (relevant for senior citizens) or gender (relevant for female taxpayers), resident or non-resident, status (relevant in case of HUF).

  • In case of any shortfall of tax payment either due to non-payment or due to non-matching of the tax payment or TDS, interest may be charged.Typically, interest till the date of processing under 234A is charged if the return is filed beyond due date, interest under 234B is charged for shortfall in payment of advance tax and interest under 234C is charged for deferment of advance tax.

  • Interest under 234C is also charged in case advance tax on account of STCG under 111A, LTCG or Winnings from lotteries is not paid, beginning from the next quarter from the quarter in which the income is earned.

  • Details of quarterwise breakup of STCG, LTCG and Winnings from Lottery as mentioned in Schedule SI after adjustment of Losses and adjustment of basic exemption threshold, if applicable, are used for calculation of advance tax liability and interest under 234C.

  • The period for which interest under 244A is calculated on refund of tax is reduced by the period of delay in filing of return.