Section 234b of Income Tax Act, 1961, deals with the calculation and payment of interest for default in payment of advance tax.
Advance tax is the tax liability that individuals, including businesses, are required to pay in installments throughout the financial year, rather than waiting until the end of the year to pay their entire tax liability.
What is 234B Interest in Income Tax?
If an individual taxpayer fails to pay advance tax or pays less than 90% of the assessed tax liability before the end of the financial year, they may be liable to pay interest under Section 234B. Here's how the interest under Section 234 b income tax is calculated: If the taxpayer has not paid advance tax or has paid advance tax which is less than 90% of the assessed tax liability, interest is charged at 1% simple interest per month or part of a month, for the period starting from the first day of the assessment year (i.e., April 1 of the relevant financial year) until the actual date of filing the return.- The interest is calculated on the amount of the shortfall between the actual advance tax paid and the minimum required advance tax payment (90% of the assessed tax liability) for each installment due date.
- The interest under Section 234B is applicable irrespective of whether the taxpayer is liable to pay any tax or not. It's purely based on the default in the payment of advance tax.
- The interest calculated under Section 234B is payable along with the filing of the income tax return.
How to Calculate Advance Tax Penalty?
Your Feedback Matters! How was this Answer?
Thanks ,We got your reaction
Shifting, House?
✔
Lowest Price Quote✔
Safe Relocation✔
Professional Labour✔
Timely Pickup & Delivery
Intercity Shifting-Upto 25% Off
Check Prices
Intracity Shifting-Upto 25% Off
Check Prices
City Tempo-Upto 50% Off
Book Now
Authors Of The Question
What is 234b Interest in Income Tax?
siya
286 Views
1 Answers
8 months
2024-04-23T19:44:12+00:00 2024-04-29T12:30:09+00:00Comment
Share