Income-tax Act,1961
Act No : 43
Section :
Tax paid by deduction or advance payment.
1[234. Tax paid by deduction or advance payment.-Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f 1-4-1989.] 2[F.-Interest chargeable in certain cases] 3[234A. Interest for defaults in furnishing return of income (1) Where the return of income for any assessment year under subsection (1) or sub-section (4) of section 139, or in response to a notice under sub-section (1) of section 142, is furnished after the due date, or is not furnished, the assessee shall be liable to pay simple interest at the rate of two per cent for every month or part of a month comprised in the period commencing on the date immediately following the due date, and,- (a) where the return is furnished after the due date, ending on the date of furnishing of the return; or (b) where no return has been furnished, ending on the date of completion of the assessment under section 144, on the amount of 4[the tax on the total income as determined under subsection (1) of section 143 or on regular assessment as reduced by the advance tax, if any, paid and any tax deducted or collected at source]. Explanation 1.-In this section, "due date" means the date specified in sub-section (1) of section 139 as applicable in the case of the assessee. 5[Explanation 2.-In this sub-section, "tax on the total income as determined under sub-section (1) of section 143" shall not include the additional income-tax, if any, payable under section 143.] Explanation 3.-Where, in relation to an assessment year, an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purposes of this section. 6[Explanation 4.-In this sub-section, "tax on the total income as determined under sub-section (1) of section 143 or on regular assessment" shall, for the purposes of computing the interest payable under section 140A, be deemed to be tax on total income as declared in the return.] (2) The interest payable under sub-section (1) shall be reduced by the interest, if any, paid under section 140A towards the interest chargeable under this section. ----------------------------------------------------------------------- 1 Prior to the omission, section 234, as amended by the Taxation Laws (Amendment) Act, 1970, w.r.e.f 1-4-1968/w.e.f. 1-4-1971, read as under: "234. Tax- paid by deduction or advance payment.-Tax paid or deemed to have been paid under the provisions of Chapter XVIIB or Chapter XVIIC in respect of any income provisionally assessed under section 141A shall be deemed to have been paid towards the provisional assessment." 2 Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 3 Ibid. 4 Substituted for "the tax on the total income as determined on regular assessment as reduced by the advance tax, if any, paid and any tax deducted at source" by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 5 Substituted by the Direct Tax Laws (Amendment) Act, 1989,w.e.f. 1-4-1989. 6 Inserted, ibid. ------------------------------------------------------------------------ 1.680 (3) Where the return of income for any assessment year, required by a notice under section 148 issued 1[after the determination of income under sub-section (1) of section 143 or] after the completion of an assessment under sub-section (3) of section 143 or section 144 or section 147, is furnished after the expiry of the time allowed under such notice, or is not furnished, the assessee shall be liable to pay simple interest at the rate of two per cent, for every month or part of a month comprised in the period commencing on the day immediately following the expiry of the time allowed as aforesaid, and,- (a) where the return is furnished after the expiry of the time aforesaid, ending on the date of furnishing the return; or (b) where no return has been furnished, ending on the date of completion of the re-assessment or re-computation under section 147, on the amount by which the tax on the total income determined on the basis of such re-assessment or re-computation exceeds the tax on the total income determined 2[under sub-section (1) of section 143 or] on the basis of the earlier assessment aforesaid. 3 (Explanation.-* * *] (4) Where as a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under subsection (4) of section 245D, the-amount of tax on which interest was payable under sub-section (1) or-sub-section (3) of this section has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and- (i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly; (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded. (5) The provisions of this section shall apply in respect of assessment for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.] 1[234B. Interest for defaults in payment of advance tax2 (1)Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of two per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year 3[to the date of determination of total income under sub-section (1) of section 143 4[and where a regular assessment is made, to the date of such regular assessment, on an amount]] equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax. 5[Explanation 1.-In this section, "assessed tax" means,- (a) for the purposes of computing the interest payable under section 140A, the tax on the total income as declared in the return referred to in that section; (b) in any other case, the tax on the total income determined under sub-section (1) of section 143 or on regular assessment, as reduced by the amount of tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income.] Explanation 2.-Where in relation to an assessment year, an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purposes of this section. 6[Explanation 3.-In Explanation 1 and in sub-section (3), "tax on the total income determined under sub-section (1) of section 143" shall not include the additional income-tax, if any, payable under section 143.] ---------------------------------------------------------------------- 1 Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 3 Substituted for "to the date of the regular assessment" by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 4 Substituted for "or regular assessment on an amount" by the Finance Act, 1995, w.r.e.f. 1--4-1989. 5 Substituted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 6 Ibid. ------------------------------------------------------------------------ 1.682 (2) Where, before the date of 1[determination of total income under sub-section (1) of section 143 or] completion of a regular assessment, tax is paid by the assessee under section 140A or otherwise- (i) interest shall be calculated in accordance with the foregoing provisions of this section up to the date on which the tax is so paid, and reduced by the interest, if any, paid under section 140A towards the interest chargeable under this section; (ii) thereafter, interest shall be calculated at the rate aforesaid on the amount by which the tax so paid together with the advance tax paid falls short of the assessed tax. (3) Where, as a result of an order of re-assessment or re- computation under section 147, the amount on which interest was payable under subsection (1) is increased, the assessee shall be liable to pay simple interest at the rate of two per cent for every month or part of a month comprised in the period commencing on the day following 2[the date of determination of total income under sub- section (1) of section 143 3[and where a regular assessment is made as is referred to in sub-section (1) following the date of such regular assessment]] and ending on the date of the re-assessment or re- computation under section 147, on the amount by which the tax on the total income determined on the basis of the reassessment or re- computation exceeds the tax on the total income determined 4[under sub-section (1) of section 143 or] on the basis of the regular assessment aforesaid. [Explanation.-Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f 1-4-1989. It was inserted by the Direct Tax Laws (Amendment) Act, 1987, with effect from the same date.] (4) Where, as a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under subsection (4) of section 245D, the amount on which interest was payable under sub-section (1) or sub-section (3) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and- (i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply, accordingly; (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded. (5) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.] ---------------------------------------------------------------------- 1 Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 2 Substituted for "the date of the regular assessment" by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 3 Substituted for "or regular assessment referred to in sub-section (1)" by the Finance Act, 1995, w.r.e.f. 1-4-1989. ------------------------------------------------------------------------ 1.683 1[234C. Interest for deferment of advance tax2 3[(1) Where in any financial year,- (a) the company which is liable to pay advance tax under section 208 has failed to pay such tax or- (i) the advance tax paid by the company on its current income on or before the 15th day of June is less than fifteen per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of September is less than forty-five per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than seventy-five per cent of the tax due on the returned income, then, the company shall be liable to pay simple interest at the rate of one and one-half per cent per month for a period of three months on the amount of the shortfall from fifteen per cent or forty-five per cent or seventy-five per cent, as the case may be, of the tax due on the returned income; (ii) the advance tax paid by the company on its current income on or before the 15th day of March is less than the tax due on the returned income, then, the company shall be liable to pay simple interest at the rate of one and one-half per cent on the amount of the shortfall from the tax due on the returned income: Provided that if the advance tax paid by the company on its current income on or before the 15th day of June or the 15th day of September, is not less than twelve per cent or, as the case may be, thirty-six per cent of the tax due on the returned income, then, it shall not be liable to pay any interest on the amount of the shortfall on those dates; ---------------------------------------------------------------------- 1 Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 3 Substituted by the Finance Act, 1994, w.e.f. 1-4-1995. Prior to the substitution, subsection (1) read as under: "Where in any financial year, *[the assessee who is liable to pay advance tax under section 208 has failed to pay such tax or], the advance tax paid by the assessee on his current income on or before the 15th day of September is less than **[thirty] per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than [sixty] per cent of the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one and one-half per cent per month of the shortfall from for a period of three months on the amount of the shortfall from [thirty] per cent or, as the case may be,
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