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Any assessee who has tax payable and don’t file his/her Income Tax Return within the due date specified u/s 139(1) is liable to pay interest u/s 234A.
Meaning of Due Date U/s 139(1)
- Non Audit Cases : 31st July
- Audit Cases : 31st Oct,
Due to Covid 19 CBDT on 20th May 2021 extended the due dates for filing of Income Tax Return up to 30th Sep 2021 (Non Audit Cases) and 30th Nov 2021(Audit Cases) wide Circular No. 9 of 2021 Dated 20th May, 2021 or Order [F.No.225/49/2021-ITA-II].
Tax Payable = Tax On Total Income-TDS & Relief U/s 89/90/90A
So clear reading of section 234A with 139(1), an assessee is liable to pay interest u/s 234A if:
- he has tax payable and
- he don’t file his/her Income Tax Return up to 30th Sep 2021(Non Audit Case) or 30th Nov 2021(Audit Cases)
| However As per Circular No. 9 of 2021 Dated 20th May, 2021 or Order [F.No.225/49/2021-ITA-II] if assessee has tax payable exceeding Rs. 1,00,000 then for the purpose of Section 234A due date extension is not applicable on him and Interest will be charged from 1st Aug 2021(Non Audit Cases) or 1st Dec 2021(Audit Cases) as the case may be but he can file his return up to 30th Sep 2021 and 30th Nov 2021 as the case may be. |
Note : Interest will be charged up to date of filing of return
| Note : If assessee pay all outstanding tax demand after the due date but don’t file the return : In such case assessee will be liable to pay interest u/s 234A on tax payable till the date of filing the return |
For better understanding let’s take some illustrations
| Tax On Total Income = 241021 |
| Relief U/s 89/90/90A = 15000 |
| TDS = 25000 |
| Date Of Filing of Return = 02/08/2021 |
| INTEREST U/S 234A : |
| Amount on which interest to be calculated : 241021-15000-25000 = 201021 |
| Period 1ST Aug 2020 To 2nd Aug 2021 i.e. 1 month |
| Conclusion for point 2 : Since Tax Payable Rs 2,01,021 is more than Rs 1,00,000 So As per Circular No. 9 of 2021 Dated 20th May, 2021 due date for calculating Interest U/s 234A will be 31st July so in this case interest will be charged from the Next Day of the original due date i.e. from 1st Aug 2021 |
____
| Tax On Total Income = 241021 |
| Relief U/s 89/90/90A = 15000 |
| TDS = 25000 |
| Date Of Filing of Return = 2/08/2021 |
| Self-Assessment Tax Paid On 01st Aug 2021 = 203027 |
| INTEREST U/S 234A : |
| Amount on which interest to be calculated : 241021-15000-25000 = 201021* |
| Period 1ST Aug 2021 To 2nd Aug 2021 i.e. 1 month |
| * Tax Paid after due date is not consider for the purpose of calculating interest u/s 234A |
| Conclusion for point 3 : Since Tax Payable Rs 201021 is more than Rs 100000 So As per Circular No. 9 of 2021 Dated 20th May, 2021 due date for calculating Interest U/s 234A will be 31st July so in this case interest will be charged from the Next Day of the original due date i.e. . from 1st Aug 2021 |
Conclusion :
| CASE I : TAX PAYABLE DOES NOT EXCEED RS 100000 | CASE II : TAX PAYABLE DOES EXCEED RS 100000 |
| INTEREST WILL BE CHARGED FROM 1st Oct 2021 OR 1st Dec 2021 AS THE CASE MAY BE TO DATE OF FILING OF RETURN | INTEREST WILL BE CHARGED FROM 1ST AUG 2021 OR 1ST NOV 2021 AS THE CASE MAY BE TO DATE OF FILING OF RETURN |
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Sir, you have mentioned in your article that “* Tax Paid after due date is not consider for the purpose of calculating interest u/s 234A”. Can you please provide me the reference for the same in Act.
NEW PORTAL IS LEVING INTEREST U/S. 234A AND 234B FROM 01.04.2021 TILL DATE OF PAYMENT. THERE IS NO OPTION TO EDIT THIS. WHAT TO DO IN SUCH A CASE.
Sir my quarry is if tax payable on 31/07/2021 is 115000 and tax RS.100000 paid in AUGUST 2021AND TAX LIABILTY IN SEPT.2021 IS ONLT 15000 THEN WHEATHER 1% CHARGED ON TOATAL OUTSTANDING FOR TWO MONTHS OR FOR ONLY ONE MONTH AUGUST 2021 IS CHARGED. PLEASE ADVISE ME. THANKS WITH REGARDS
Sir I am senior citizen my tax liability is about 193000 and tds 89000 and tax liabily 104000 and I pay 100000 in 28th aug.and now in portal show demand of Rs 2080 in the portal and no interest was less for deposit of Rs.100000 in aug.2021. please tell me if I not file return in sept.2021 then this interest in oct.2021 increase or not.
I have paid 2290 as interest under section 234 A even if I received for interest and penstion and dividend income form 16 and 16 A received very late after 31/07/2021 and 26AS ALSO GENERATED VERY LATE. CAN I FILE COMPLAINT FOR REFUND OF RS.2290. PLEASE REPLY ME MY MOBILE NO.6239180320 AND WHATS APP NO.6239180320 AND ALSO 7009974757. THANKS WITH REGARDS
When senior citizens are exempted from paying advance tax, interest on self assessment tax should not be charged even if the tax is more than one lakh. Extension of last date due to defective portal and charging interest seems inappropriate and needs consideration. Moreover, in marginal cases of below one and one lakh is definitely painful .
But new it portal levid interest u/s 234A for the above case as on 11.08.21.
A SENIOR CITIZEN , TAX PAYABLE IS 113000;
ON 31.7.21, SHE PAYS, 50000 AS SELF ASSESSMENT TAX; 63000 STILL PAYABLE, WHICH IS LESS THAN 100000; WILL PENALTY BE IMPOSED ON 63000, FROM 1.8.21 ONWARDS OR NO, PL.GUIDE.
As tax is less than Rs 100000 so interest u/s 234A is not applicable on him