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Interest charges u/s 234B , 234C ( URGENT )

CuriousMind (NA) (139 Points)

25 July 2022

Dear CA Club ,

While filing ITR1 this year , I observed additional interest components u/s 234B and 234C being charged when we add FD interest income .

When 10% TDS is already deducted by bank while paying out interest and deposited the tax with govt , am curious to understand where might be the delay has happened ( as these 2 sections clearly says delay in tax deposits ) ) Is it due to any potential delay in tax deposits by banks itself ?

Can we nullify these 2 components by any chance ?

Kindly help urgently 🙏

Best Regards

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7 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177840 Points)
Replied 25 July 2022

The interest component gets activated only if you have tax liability over and above Rs. 10,000/- after deduction of all the TDS deducted & advance taxes paid.

If your tax liability is below that, you need not worry.

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shivam bhatia (231 Points)
Replied 25 July 2022

It may be added because sometimes bank deduct TDS in Q4 but your income is earned in Q1.

it may be the reason, may be I'm wrong

CuriousMind (NA) (139 Points)
Replied 25 July 2022

Yes sir , it's more than 10K . But I'm trying to understand where might be the delay & who delayed ?

CuriousMind (NA) (139 Points)
Replied 25 July 2022

Thanks Shivam , you mean Q4 of 2021 and Q1 of 2022 for FY 21-22 ?

But I don't have any FD interest income in Q1 of 2022 but very little SB interest income in Q1 of 2022 .

Please help clarify !

shivam bhatia (231 Points)
Replied 26 July 2022

It can be clarified after analysing computation!

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Mani44 (NA) (26 Points)
Replied 26 July 2022

Bank deducts TDS @ 10%. If you are in higher tax bracket ,your interest income will be taxed at higher slab. Since you did not pay advance tax therefore your are liable to pay interest penalty.

CuriousMind (NA) (139 Points)
Replied 26 July 2022

Thanks mani for this , can you please help understand, when and how to pay advance tax if my interests are during April , June , Sep and December during the FY .