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LIMIT FOR CALCULATING INTEREST UNDER SECTION 234 A B C

SUNNY (STUDENT CS) (377 Points)

09 June 2010

what is the limit for calculating interest on tax under section 234 a b & c IN FINANCIAL YEAR 2009-10

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6 Replies

Akhil Gupta (Manager F&A) (856 Points)
Replied 09 June 2010

Simply the limit is period of default.

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SRINIVASA MURTHY (Asst Manager (Finance)) (186 Points)
Replied 09 June 2010

234A: for defaults in furnishing return on income ROI is 1% simple interest per month r part of month

PERIOD OF INTEREST

COMMENCING ON THE DATE IMMEDIATELY FOLLOWING THE DUE DATE FROM FILING THE RETURN OF INCOME AND ENDING ON

a. THE DATE OF FURNISHING THE RETURN (WHERE RETURN HAS BEEN FILED AFTER THE DUE DATE) OR

b. THE DATE OF COMPLETION OF ASSESSEMENT U/S 144 (WHERE NO RETURN IS FURNISHED)

234B: Interest for default in payment of advance tax ROI is 1% for every month or part of month

a. where assesse who is liable to pay advance tax, has filed to pay

b. an assessee who has paid advance tax but the amount of advance tax paid by him is less than 90% of assessed tax

from april 1st of the assessement year to the date of determination of total income under section 143(1) or where regular assessment is made to the date of such regular assessment.

234C: for deferment of advance tax ROI 1%

tax assessed - tax paid

SUNNY (STUDENT CS) (377 Points)
Replied 10 June 2010

m asking about the tax payable amount above 5000 or 10000 it is applicable

Shobhit (CA, CS) (100 Points)
Replied 10 June 2010

As per Section 208, it is obligatory to pay advance tax where the advance tax payable is Rs. 10,000 /- or more w.e.f. from FY 2009-10.

Till FY 2008-09 the limit was Rs. 5,000 /-

Also, there no need of paying such advance tax, in case the assessee has opted for payment of tax under presumptive basis under section 44AD (i.e. 8% of turnover) from FY 2010-11 (AY 2011-12)

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SRINIVASA MURTHY (Asst Manager (Finance)) (186 Points)
Replied 10 June 2010

interest is payable on the amount which is defualted by the assessee, interest is payable on the portion of the amount = TAX ASSESSED - TAX PAID, b it Rs.100 r Rs.100000

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PRATEEK (ACA) (102 Points)
Replied 25 June 2010

if the net tax payable exceed Rs 10000 then then interest would be calculated @ 1% u/s 234c,if the tax amount is not paid till the end of previous year then interest would be calculated u/s 234b @ 1% per month or part therof from 1st april of the A.Y to 31st of july or 31st of september as the case may be. Interest would be calculated u/s 234a if the tax amount is not paid till the last date of filling of return of income @ 1%p.m or part thereof till the time of payment of taxes of completion of assesment whichever is earlier.