Payment of Advance tax & Filing of Income tax returns

Under the Income Tax Act of 1961, there are different types of interests leviable on different delays or defaults with regard to payment of taxes and filing of returns. Let’s understand the consequences of non-payment or short payment of taxes, non-filing or late filing of returns

1.     234 A Interest – Interest for delay in filing Return of Income

If the taxpayer files the return of income after the due date specified in this regard or files an updated return or files a return in response to a notice, interest under section 234A will be levied.

2.     234 B Interest - Interest for default in payment of advance tax

Interest under section 234B is levied in following cases:

(a) When the taxpayer has failed to pay advance tax; or

 (b) Where the advance tax paid by the taxpayer is less than 90% of the assessed tax.

Advance tax shall be payable by the taxpayer, if estimated tax liability during the financial year is ten thousand rupees or more.

3.     234 C Interest - Interest for default in payment of instalment(s) of advance tax

Interest is levied for failure to pay any instalment of advance tax as per the requirement.

4.     234 F – Fees for default in furnishing of return

Where a person required to furnish a return of income under section 139, fails to do so within the time prescribed in sub-section (1) of said section, he shall pay, by way of fee, a sum of,

(a)   Five thousand rupees, if return furnished on or before 31st December of the Assessment year

(b)   Ten thousand in any other cases

If the total income of the person does not exceed five lakh rupees, the fee payable under this section shall not exceed one thousand rupees.