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interest 234A

Ganga (CA Final) (101 Points)

08 October 2010

hi Income tax -Self assessment paid on september (Individual) and the return is filed on October 8th ,will there be interest 234A for the october month also in the assessment of assessing officer.

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4 Replies

Anuraag Sharma (Sr Executive Finance) (845 Points)
Replied 09 October 2010

Yes.

u/s 234A intt. is calculated till the date of furnishing of return.

Hence in this case interest for the month of oct will aslo be calculated.

Interest for defaults in furnishing return of income.

234A. (1) Where the return of income for any assessment year under sub-section (1) or sub-section (4) of section 139, or in response to a notice under sub-section (1) of section 142, is furnished after the due date, or is not furnished, the assessee shall⁴⁹ be liable to pay simple interest at the rate of ⁵⁰[one] per cent for every month or part of a month comprised in the period commencing on the date immediately following the due date, and,—

(a) where the return is furnished after the due date, ending on the date of furnishing of the return; or

(b) where no return has been furnished, ending on the date of completion of the assessment under section 144,

on the amount of ⁵¹[the tax on the total income as determined under sub-section (1) of section 143 or on regular assessment as reduced by the advance tax, if any, paid and any tax deducted or collected at source].

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CA.G.Muguntha Narayanan (Internal Auditor at TVS Motors) (2195 Points)
Replied 09 October 2010

Dear Giriraj,

For claiming enhanced depreciation, the assessee must be engeaged in the manufacture or production of any article or thing. A construction contractor just converts the raw materials (sand, bricks etc) into a building. However, he does not buy the raw materials of his own. The R.M. is provided by the owner. The contractor jos is to just convert these things into a house. SO there is no scope for enhanced depreciation.

However, if a person buys sand, bricks, cement etc of his own and constructs a property, he can claim enhanced deprection, provided he is engaged in teh business of doing so

Max Payne (employed) (2574 Points)
Replied 09 October 2010

Originally posted by : vikrutha
	hi Income tax -Self assessment paid on september (Individual) and the return is filed on October 8th ,will there be interest 234A for the october month also in the assessment of assessing officer.

No applicability of section 234A, where the self assessment tax is paid fully by the assessee before the due date of filing return.

This view was taken by the Delhi HC in Prannoy Roy and Anr Vs CIT (2002)

Hence in your case, interest will not be attracted. (Assuming that his due date of filing return is September 30th)

CA Raviteja (Risk Management) (585 Points)
Replied 11 October 2010

YES... sec234A is applicable.... Sec234A deals especially with late return of filing. Considering that due date is 30th sept., in your case, the DD is 8th oct. Hence, interest is chargeable on balance tax payable for 1 month.......