Table of Contents
How is 234B and 234C calculated?
If the payment falls short of 90% of the tax required to be paid, the interest under section 234B shall be charged. Hence there is a shortfall of payment….Interest on defaults in payment of Advance tax – Section 234B of the Act.
| DUE DATE OF INSTALLMENTS | AMOUNT PAYABLE |
|---|---|
| On or before 15th March | 100% of advance tax |
How is Section 234C calculated?
Interest Payable Under Section 234C Interest is charged at 1% of the total outstanding due on the advance tax payable. It is calculated from the individual cut off dates separately till the date on which the due tax actually gets paid.
What is Section 234B and 234C?
234A. Delayed Payment of Advanced Tax. 234B. Delayed Payment of Advanced Tax Instalment. 234C.
How is interest under 234B calculated?
Under section 234B, interest for default in payment of advance tax is levied at 1% per month or part of a month. The nature of interest is simple interest. In other words, the taxpayer is liable to pay simple interest at 1% per month or part of a month for default in payment of advance tax.
When 234C interest is applicable?
Interest under section 234C is levied for a period of 1 month in case of short fall in payment of the last installment and for a period of 3 months in case of short fall in payment of 1st, 2nd and 3rd instalments.
Is 234B applicable for senior citizens?
As per Sec. 234B of the I-T Act, senior citizens without professional income are not liable to pay advance tax. As of now, banks are deducting 10% tax on fixed deposit interest earned in the case of senior citizens also. This tax deduction is tantamount to compulsory deduction of advance tax payment.
What is interest calculation under section 234A and 234B and 234C?
Interest Calculation of Under Section 234A, 234B And 234C of Income Tax Act, Along With Provision And Example Applicability:- Every Assessee is required to pay advance tax whose income tax liability is ₹10000 or more.
What is the shortfall under section 234B of income tax?
Hence 234B is attracted. (Shortfall means difference between assessed tax and advance tax paid). Interest under section 234 B = 115000*1%*4 months (Apr-July) = Rs.4600
How is 234C calculated for advance tax?
60% of total advance tax. Section 234C is very simple. If the advance tax paid is in underestimated instalments or if it s not paid at all, Section 234C gets attracted. Interest is calculated on the difference between the installment paid and installment payable.
What is the TDs amount attracted under section 234B?
TDS = Rs.50000 Advance tax payment details are as follows: Hence 234B is attracted. (Shortfall means difference between assessed tax and advance tax paid). Interest under section 234 B = 115000*1%*4 months (Apr-July) = Rs.4600