What is 234A 234B 234C interest?
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 234A interest is applicable?
Interest under section 234A is levied for delay in filing the return of income. Interest 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 delay in filing the return of income.
How is interest calculated on 234A?
Interest = 100,000 x 1% x 7 = Rs. 7,000 This Rs. 7,000 is over and above the tax amount that you will be paying in any case. If you do not file your return at all, you will have to pay 1% interest till the end of the assessment year i.e. 31st March.
How do you calculate interest 234A 234B 234C with example?
Solution: According to section 234B mentioned above, interest @ 1% will be calculated on the taxes due for a period of 4 months (April, May, June & July), considering July as a full month. Interest liability of Mr. Sachin is – (₹ 84790 – ₹ 70000 = ₹ 14790). Thus, interest payable u/s 234B will be ₹ 592.
When 234B & 234C is applicable?
Interest under section 234B is applicable when: Your tax liability after reducing TDS for the financial year is more than Rs 10,000 and you did not pay any advance tax.
What is difference between 234A 234B 234C?
Under Section 234B, the taxpayer must pay at least 90% of the tax that is due to be paid at the end of the financial year. The taxpayer has the provision to pay his tax in the form of 4 instalments. Under Section 234C, a penalty is imposed if the tax payment is delayed.
What is interest under 234C?
Interest under section 234C is levied at 1% per month or part of a month. Therefore, in case of for short payment/ non-payment of individual installment(s) of advance tax, the taxpayer is liable to pay simple interest at 1% per month or part of a month (that is because fraction of a month is considered as full month).
Who is liable for advance tax?
As per section 208 of the Income Tax Act 1961, every person whose estimated tax liability for the year is more than or equal to `10,000 is liable to pay advance tax. Those who are excluded from paying advance tax are senior citizens who are above the age of 60, not having any income from business or profession.
How do you calculate interest income?
How to compute interest income
- Take the annual interest rate and convert the percentage figure to a decimal figure by simply dividing it by 100.
- Use the decimal figure and multiply it by the number of years that the money is borrowed.
- Multiply that figure by the amount in the account to complete the calculation.
What is the penalty for not paying advance tax?
Interest under Section 234B is levied if the taxpayer has not deposited advance tax or if the advance tax deposited is less than 90% of the total tax liability. The taxpayer will be liable for interest under Section 234B at 1% per month or part of the month from April till the date of payment of tax.
How advance tax is calculated with example?
Advance tax can be calculated by applying the slab rate applicable to a financial year on his total total estimated income for that year. For example your total income for FY 2018-19 is Rs. 5,50,000, then your estimated liability is Rs. 23,400 calculated as follow.
What happens if advance tax is not paid?
