This comprehensive and user friendly calculator can be used forcalculation of interest payable under Sections 234A, 234B and 234C of Income Tax Act for default / deferment in payment of Income Tax / Advance Tax and / or filing of Tax Return by specified due dates.
Where the return of income for any assessment year is furnished after the due date or is not furnished, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month for the period commencing on the date immediately following the due date upto the date of furnishing the return (in cases where return is furnished after the due date) or upto the end of the Assessment Year (in cases where no return is furnished) on the amount of shortfall in total income tax payable by the assessee.
In simple words, interest @ 1% per month is payable on the amount of income tax paid after the due date for filing of the return.
An assessee who is liable to pay advance tax has failed to pay such tax or where the advance tax paid by such assessee is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month for period from the date on which the payment of advance tax became due on the amount of shortfall in the amount of advance tax paid.
In simple words, interest @ 1% per month is payable on the amount of income tax paid after the end of the financial year.
An assessee, (other than an assessee who declares profits and gains in accordance with the provisions of sub-section (1) of section 44AD or sub-section (1) of section 44ADA, as the case may be) who is liable to pay advance tax under section 208 has failed to pay such tax or
Provided that (a) if the advance tax paid by the assessee on the 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, the assessee shall not be liable to pay any interest on the amount of the shortfall on those dates.
(b) an assessee who declares profits and gains in accordance with the provisions of sub-section (1) of section 44AD or sub-section (1) of section 44ADA, as the case may be, 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 its current income on or before the 15th day of March is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one per cent on the amount of the shortfall from the tax due on the returned income.
Please note that in case of salaried employees, the advance tax liability is to be computed on the income other than salary income. TDS deducted by the employer is not to be adjusted against this liability.
For more details, please refer to Section 234A, 234 B and 234C of Income Tax Act, 1961.