Summary: Interest charges under Sections 234B and 234C of the Income-tax Act are a common concern for taxpayers who have a shortfall or delay in paying advance tax. However, the article suggests that taxpayers may be paying this interest unnecessarily because the tax department is ignoring a key provision: Section 210. This section empowers the Assessing Officer (AO) to issue an order directing a taxpayer to pay advance tax based on estimated income. It was intended as a safeguard, providing a clear and official reminder of one’s tax liability. In practice, however, the tax department has ceased issuing these reminders, placing the full burden of estimation on the taxpayer. The author argues that this practice is unfair, as it leads to taxpayers with variable or unpredictable income paying “compensation” to the government for delays they may not have been able to avoid. The article proposes a digital revival of Section 210, where the tax department could use modern systems to automatically compute and issue indicative advance tax reminders based on data available in the Annual Information Statement (AIS) or Form 26AS. Until such a change is implemented, Section 210 remains a provision that protects taxpayers only in theory, not in practice.
Interest under 234B/234C is deliberate charge of more interest!! Are taxpayers paying interest just because Section 210 is ignored?
Most taxpayers know the pain of paying interest u/s 234B & 234C for shortfall or delay in advance tax. But very few know that the Income-tax Act actually provides a safeguard – Section 210.
What is Section 210?
Section 210 empowers the Assessing Officer (AO) to issue an order requiring a taxpayer to pay advance tax, based on estimated income. It was meant to be a reminder mechanism – the Department alerts you of your liability, and you either pay or revise it if your income differs.
Reality check
In practice, Section 210 orders are almost never issued today.
Instead, the onus is 100% on the taxpayer to estimate and pay advance tax.
If you miscalculate → the system quietly levies interest u/s 234B & 234C.
So while a reminder exists in law, it’s ignored in reality.
Why is this unfair to taxpayers?
Taxpayers remain unaware of exact liability until filing.
Section 210 was designed as a safeguard, but has become a dead letter law.
The system feels tilted towards collecting interest rather than ensuring compliance.
The defence of CBDT
AIS/26AS already shows income.
Advance tax is taxpayer’s responsibility.
Interest is only “compensation” to Govt for delay.
But let’s be real – many taxpayers (especially with variable income, capital gains, or business fluctuations) cannot precisely predict their income mid-year.
A way forward
If Section 210 exists, why not use it digitally?
Step1 – Auto-compute indicative advance tax from AIS data.
Step2 – Issue 210 orders online as reminders.
Step3 – Charge interest only if taxpayers ignore the order, not because they were left guessing.
Until then, Section 210 will remain an example of how sometimes the law protects taxpayers only on paper, not in practice.
Think once again
1. Are we being set up to fail just so the system can collect more “interest”?
2. Should the Department revive Section 210 (clause 407 of the new Act) and issue auto-reminders, or is self-assessment enough in today’s digital era?
3. If it is not planned to be followed then why it is still continued in clause 407 of the new Act?
4. The Department says ITR filing is so simple that taxpayers don’t need professionals. But if that’s true, is it fair to expect them to know hidden provisions like Sec. 210 — and then charge interest when the Department itself doesn’t use it?
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