Failed to pay taxes on time? You can pay taxes now, but interest on the delay in payment of taxes is required to be paid. There are three sections governing interest on the delay of payment of taxes.

**In this blog, we will discuss interest under Sections 234A, 234B, and 234C of the Income Tax Act, of 1961. The brief of the three sections is as below:**

Section 234A: | Delay in filing the return of income |

Section 234B: | Non-payment or short payment of advance tax |

Section 234C: | Non-payment or short payment of individual instalments or instalments of advance tax (i.e., deferment of advance tax) |

But before we delve into the provisions of Sections 234A/B/C, it's important to understand the provisions of Rule 119A relating to the computation of interest under the Act. The interest is to be computed in the following manner:

**Where interest is to be calculated on an annual/yearly basis, the period shall be rounded off to a whole month, and any part/fraction of a month shall be ignored.****Where the interest is to be calculated for every month or part of a month (not in terms of years), any fraction of a month shall be deemed to be a full month.****The amount of interest calculated shall be rounded off in multiples of a hundred, and for this purpose, any fraction of one hundred rupees shall be ignored.**

To understand it even more properly, let's take an example. Suppose you have to compute interest on Rs. 10,655/- for 3 months and 7 days, as per rules, Rs. 55 shall be ignored, and the 7 days shall be taken as 1 month. Therefore, your interest would be calculated at Rs. 10,600 for 4 months.

Interest under Section 234A is payable if you file your income tax return after the due date specified. | Interest will be levied at 1% per month or part of a month from the period starting on the date immediately following the due date of filing the return and ending on the date of actually filing the return. |

For example, if your tax liability for the financial year 2023-24 amounts to Rs. 19,500, and the due date of filing the return of income is 31.07.2024, but you file your return on 30.08.2024, then you will be liable to pay interest of Rs. 195. This is calculated at the rate of 1% on Rs. 19,500 for 1 month, as per Section 234A.

Interest as per Section 234B is payable if you fail to pay advance tax or if you pay advance tax which is less than 90% of your total tax liability. | Interest will be levied at 1% per month or part of a month, from 1st April till the date of the actual determination of income. The amount on which interest shall be charged will be the amount of unpaid/short-paid advance tax (i.e. Total assessed tax advance tax paid – TDS etc). |

For instance, if your tax liability for the financial year 2023-24 totals Rs. 1,00,000, and you have already paid an advance tax of Rs. 95,000 (which exceeds 90% of the total tax), then no interest under section 234B shall be applicable to you.

Interest under section 234C for default in payment of instalment (s) of advance tax is calculated based on specific conditions:

For instance, if you file your return on 10th December 2024 against the due date of 31st July 2024, and your tax liability is Rs. 40,000, out of which Rs. 35,000 has been paid as advance tax by you.

The advance tax paid is paid as follows:

Rs 6,000 | before 15th June |

Rs 8,000 | before 15th September |

Rs 21,000 | before 15 th December |

Interest shall be calculated as under:

We hope after reading you are more aware of Sections 234 A/B/C. We request you to file your ITR within the due date provided so that no interest is demanded from you. But in case, if you are liable to pay interest under the above-mentioned sections, we are confident that you'll calculate them correctly.

Hope This Helps.

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