CA. M. Lakshmanan

In the Income Tax Website e filing is enabled for ITR – 1, ITR – 2, & ITR – 4S only and for all other categories it is yet to be done.If an assessee has failed to pay 90% of Income Tax payable as Advance Tax within the due dates and if he prefers to file the return now by paying the tax due as Self Assessment Tax with interest under section 234 B & C he is not allowed to file the same since the respective returns of income are not yet enabled in the ‘Income Tax site’.

Further If the assessee pays the tax now i.e. in the month of May and files the rerun when the same is enabled in the site, say in the month of June or July or later the CPC will charge interest under section 234B till the month of filing the return and will raise demand. Since it is the fault of the department the assessee should not be peanlised. Hence suitable instruction/notification may be issued immediately so that the assessees who are ready with particulars can pay tax now calculating interest till the month of payment and file the returns when they are enabled in the site and the returns are processed at the CPC without charging interest under section 234B for the period form the month of payment till the month of e-filing the return.

Extract of Section 234B is as follows :-

Section 234B – Interest for defaults in payment of Advance tax 

(A) Where in any financial year, an assessee who is liable to pay advance tax u/s. 208 has failed to pay such tax or the advance tax paid by such assessee is less than 90% of the assessed tax, the assessee shall be liable to pay simple interest @ 1% for every month or part of a month.

(B) The period for which interest is payable would be the period from the first day of April next following such financial year to the date of determination of total income u/s. 143(1). However, if regular assessment u/s. 143(3) is completed, then interest is chargeble up to the date of regular assessment.

(C) The amount on which interest shall be calculated shall be the amount equal to the assessed tax or on the amount by which the advance tax paid falls short of the assessed tax.

Read –234ABC Interest Calculator & Brief with Examples

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  1. CA. M. Lakshmanan says:

    Dear Mr. Prashant R Karia,
    Even if Mr. Murthy does not have business income he has pay interest u.s 234 B if the tax payable, after deducting the ‘TDS’ and ‘Advance Tax if any paid’ from the tax payable on the total income, exceeds Rs. 10,000/- till the date of filing the return of income. The situation remains the same even if the self assessment tax is paid before end of May/June and the return is filed in July.

  2. Prashant R Karia says:

    Dear Murthy Sir,

    As you are senior citizen and do not have any business income than you are not liable to pay any interest u/s 234B or 234C.

  3. Rsr murthy says:

    I am a senior citizen.
    My income is from pension and interest from bank FDs.
    I am yet to receive TDS form from employer and one bank.
    I did not pay any advance tax though the banks paid tax on my FDs to govt at 10 percent every quarter.
    Yesterday I paid a part of the tax as self assesment tax.
    I intend to pay the balance tax before filing return on knowing my total income.
    I hope I need not pay any interest as I am a senior citizen.
    Any chance of ITO demanding interest?

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