Sections 234A, 234B & 234C Explained: Interest on Late Filing & Payment
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Understanding Interest Penalties: Sections 234A, 234B & 234C
The Income Tax Act imposes interest charges for delays in filing
returns or paying taxes. Here's everything you need to know.
Section 234A: Interest for Late Filing
Applicable when:
- ITR filed after due date
- Applies to both salaried and business taxpayers
Interest rate: 1% per month or part of month
Calculation: Interest is charged on the tax amount due from the
original due date until the actual filing date.
Section 234B: Interest on Tax Due
Charged when you don't pay at least 90% of your tax liability
before the end of the financial year.
Section 234C: Interest on Advance Tax Shortfall
Applies when you don't pay the required advance tax installments
on time.