Interest Under Section 234A (Delay in Filing Return)

• Applies when the return is filed after the due date and tax is unpaid.
  
• Interest is charged at 1 percent per month or part of a month.
  
• Calculated on the unpaid tax amount from the due date till the date of actual filing.
  
• It is applicable only if there is any tax payable after adjustment of TDS or advance tax.
  
• Even one day delay in a month leads to a full month’s interest charge.
  

Interest Under Section 234B (Default in Advance Tax Payment)

• Applies if 90 percent of total tax is not paid as advance tax by March 31.
  
• Interest is calculated at 1 percent per month from April 1 till the date of payment.
  
• It is levied on the unpaid amount of assessed tax.
  
• This interest continues until the full tax is paid.
  
• Applicable even if advance tax was partially paid but below the threshold.
  

Interest Under Section 234C (Deferment of Advance Tax)

• Applies when instalments of advance tax are not paid on time.
  
• Interest is calculated at 1 percent per month for a fixed number of months.
  
• Applicable on the shortfall amount in each quarterly due.
  
• Interest applies for 3 months for each default in June, September, and December instalments.
  
• For March instalment, interest is calculated for 1 month only.
  

Calculation Base and Rounding Rules

• Interest is calculated on the tax payable after reducing TDS, TCS, MAT credit, and advance tax.
  
• Amounts are rounded off to the nearest ₹100 as per income tax rules.
  
• The calculation is performed separately for each applicable section.
  
• Interest under different sections is charged cumulatively and independently.
  
• No compounding of interest is done under these provisions.
  

Payment and Reporting

• Interest must be paid before or at the time of return filing.
  
• It is included in the self-assessment tax amount under challan ITNS 280.
  
• The amount must be disclosed in the tax return under the relevant interest fields.
  
• Non-payment may lead to further demand notices and penalties.
  

Proper calculation helps avoid delays and legal issues during assessments.