FAQs on Interest Under Sections 234A, 234B, 234C:

FAQs on Interest Under Sections 234A, 234B, 234C

The sections 234A, 234B, and 234C of the Income Tax Act are taken into account when a penalty needs to be imposed for delayed tax compliance. All these sections are applied in different circumstances: Section 234A: This section is applied in cases where income tax returns are either filed late or aren't filed at all. The interest charged under this section stands at 1% per month starting from the due date till the return is filed. Section 234B: Applied in scenarios where advance tax payments are less than 90% of the assessed tax. This also comes with the charge of 1% monthly interest.

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Section 234C: Imposed when the advance tax instalments fall short of the required percentage. The interest rates vary based on the amount paid and the due dates.

How is Interest Under Section 234C Calculated?

For corporate and non-corporate assessees:

Due date of instalment	Amount on which interest is payable	Rate of Interest	Period of interest
On or before June 15	15%*	1% per month	3 months
On or before September 15	45%*	1% per month	3 months
On or before Dec 15	75%*	1% per month	3 months
On or before March 15	100%*	1% per month	1 month

For assessees opting for sections 44AD or 44ADA:

Due date of instalment	Amount on which interest is payable	Rate of Interest	Period of interest
On or before March 15	100%*	1% per month	1 month
On or before March 15	100%*	1% per month	1 month

Consequences of Failure to Pay Advance Tax

A failure in paying advance tax on or before the designated deadline attracts interest under Sections 234B and 234C of the Income Tax Act.

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• Interest Charged Under Section 234B

Failure to pay an advance tax or 90% of total tax by 31st March will attract an interest charge of 1% per month.

• Interest Charged Under Section 234C

Particulars	Rate of Interest	Period of Interest	Amount on which interest is calculated
If Advance Tax paid by 15th June is less than 15%	1% per month	3 months	15% of Amount* (-) tax paid before June 15
If Advance Tax paid by 15th September is less than 45%	1% per month	3 months	45% of Amount* (-) tax paid before September 15
If Advance Tax paid by 15th December is less than 75%	1% per month	3 months	75% of Amount* (-) tax paid before December 15
If Advance Tax paid by 15th March is less than 100%	1% per month	1 month	100% of Amount* (-) tax paid before March 15