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difference between 234a,234b,234c

chanakya (Teacher) (183 Points)

02 February 2010

Friends, I have been on the look out for a nice explanation about the difference between section 234a,b,c.The more i read the more i get confused. can any one explain to me what the real difference is in lucid terms without using confusing jargon?

Pl.compare the following two links.

https://www.outlookmoney.com/scriptts/whatifyoudont.asp

and /forum/applicability-of-advance-tax-66117.asp

Though the employee has not paid any advance tax in september, in the latter link it was explained that no interest is payable. Pl. make me clear about this, my learned friends. thanks in advance.

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13 Replies

Amir (Learner) (4016 Points)
Replied 02 February 2010

Dear Chanakya,

234 A - Deault - Failure to furnish return within due dates, i:e 31st July or 30th September

234 B - Default - Non payment of Advance Tax(at least 90% of ur liability)

234 C - Default - Deferment of Installment of Advance Tax

Assessee is liable for payment of advance tax is his Advance tax liability (i:e TAX - TDS) exceeds Rs. 10,000/-

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chanakya (Teacher) (183 Points)
Replied 02 February 2010

Dear Amir,

Thank you for your reply. Is the limit raised from 5000 to 10000 recently?.

I have given you a second link in my first post. There it is given that the assesse attracts penalty only under 234 B. could you tell me why 234a is not applicable in this case?

I cannot understand from this answer what 234c is please explain me that also.

Amir (Learner) (4016 Points)
Replied 02 February 2010

Dear Chanakya,

1) Limit from 5k to 10k has been raised by the latest budgest announed in August 2009.

2) 234 A gets attracted when Return of income is not filed with in due date...There cannot be two penalties for a single default...For non payment of Advance tax Sec 234 B is there..

3) Advance tax is to be paid in certain installments like for corporate assesses in 4 & in 3 installments in case of others..% of tax to be paid under these installments has also been prescribed..So, if an assessee pays the advance tax completely but not as per the % specified under this section then Interest u/s 234 C shall be charged & not 234 B..

chanakya (Teacher) (183 Points)
Replied 02 February 2010

Dear Amir,

Now i am very clear about the difference. I don't know how infinitely i should be thankful to you because each time i post my query, the answer must be from yours. The answer has given rise to another doubt. Suppose an employee paid the correct percentage of advance tax based on the amount he expected to be receiving in the financial year. If the actual amount doesnot match his expectations, will he also be liable to pay interest under 234b.

chanakya (Teacher) (183 Points)
Replied 02 February 2010

Dear Amir,

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Amir (Learner) (4016 Points)
Replied 02 February 2010

Dear Chankaya,

Thanks 4 those kind words, I m just sharing my understanding.....

It is obvious that one cannot 100% be correct in predicting his tax liability, that is why there is a cushion of 10%, i:e if an assessee has paid advance tax upto 90% of his tax liability then Interest u/s 234 B shall not be charged...

CA Dhiraj Ramchandani (CA, M. com) (10823 Points)
Replied 02 February 2010

Yes, he will be liable for interest under 234B definately... Whether such increased income is assessed in normal circumstances or after scrutiny.....

So, he's liable to pay interest on it

CA Dhiraj Ramchandani (CA, M. com) (10823 Points)
Replied 02 February 2010

Hi chanankya, amir is correct..

What i reffered was that if anyone fails to pay even 90%... then has to pay interest as per 234B

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Amir (Learner) (4016 Points)
Replied 02 February 2010

Hi Dhiraj,

The excel sheet which u have sent is quite good..........

Well done Brother........

1 Like

CA Dhiraj Ramchandani (CA, M. com) (10823 Points)
Replied 02 February 2010

Ya, i know, it was quit amasing so posted...

Thanx for the gesture

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Narendra Pati (GM) (21 Points)
Replied 07 March 2011

A little clarification I offer . Sec 234C is for deferment (delay) in advance tax tax till 31st March where as Sec 234B is for short fall beyond 10% in total tax liability ascertain thru assessment etc from 1st April onwards.

Hope it is clear now 234C till 31st march and 234B there after.

regds

Narendra

Shuhaib (Trainee) (21 Points)
Replied 03 February 2016

Excuse Me All,

Here if Sec 234b is Applicable in any cases, it also Applicable sec 234c.....

My Doubt Is at what all circustanses sec 234b is applicable but sec 234c is not applicable......?

Thanking You........

Lalan Prasad (Student CA IPC / IPCC) (43 Points)
Replied 25 April 2018

it means a person who is not pay 80% advance tax, liable to pay intrest as per section 234B and 234C . However bot section levied on this ............?