Taxation Exam > Taxation Notes > Fast Track Quick Revision Income Tax > Interest payable by assessee (Section 234A, B & C)
Interest payable by assessee (Section 234A, B & C)
| 234A | 234B | 234C | |
| Nature of default | ROI not filed by DD | Advance tax < 90% of assessed tax | Advance tax not paid in time |
| Default period | Due date to filing date | 1-4 to assessment date | Payment after 15th quarter 3 3 3 1 |
| Tax due | Assessed tax – TDS – Ad. Tax | Assessed tax – TDS – Ad. Tax | Returned tax – TDS – Ad. Tax |
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FAQs on Interest payable by assessee (Section 234A, B & C)
| 1. What is interest payable by the assessee under Section 234A, B & C? |  |
Ans. The interest payable by the assessee under Section 234A, B & C refers to the interest charged by the tax authorities for delayed payment of taxes. Section 234A deals with interest for delay in filing the income tax return, Section 234B deals with interest for delay in payment of advance tax, and Section 234C deals with interest for deferment of advance tax payments.
| 2. How is interest under Section 234A calculated? | |
Ans. Under Section 234A, if an assessee fails to file the income tax return by the due date, they are liable to pay interest at the rate of 1% per month or part thereof on the amount of tax payable. The interest is calculated from the due date of filing the return until the date of actual filing.
| 3. When is interest under Section 234B applicable? | |
Ans. Interest under Section 234B is applicable when an assessee fails to pay the advance tax or does not pay the full amount of advance tax as required. The interest is charged at the rate of 1% per month or part thereof on the amount of tax payable on the total income, from the due date of advance tax payment until the date of actual payment.
| 4. How is interest under Section 234C computed? | |
Ans. Under Section 234C, interest is levied if an assessee fails to pay the advance tax or pays less than the required amount in installments. The interest is calculated at different rates for different installments and is based on the amount of shortfall in each installment and the due dates. The interest rate for the first installment is 1% of the shortfall, for the second and third installments, it is 1% of the shortfall for three months, and for the fourth installment, it is 1% of the shortfall for one month.
| 5. Can interest under Section 234A, B & C be waived off? | |
Ans. The interest under Section 234A, B & C is generally not waived off as it is a penalty for delayed payment or non-payment of taxes. However, in certain exceptional cases where the delay or shortfall is due to genuine reasons beyond the control of the assessee, they can apply for a waiver or reduction in interest by submitting an application to the tax authorities along with supporting documents. The decision to grant a waiver or reduction is at the discretion of the tax authorities based on the merits of each case.
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Apr 21, 2026 Last updated
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