Overview of Section 234B

• Section 234B deals with interest for default in payment of advance tax.
  
• It applies when a company fails to pay at least 90 percent of its assessed tax by March 31.
  
• Interest is levied at the rate of 1 percent per month or part of a month.
  
• The period is calculated from April 1 of the assessment year till the date of payment.
  
• It is applicable even if partial advance tax was paid but fell short of the threshold.
  

Applicability of Section 234B

• Triggered when no advance tax is paid or the advance tax paid is less than 90 percent of the final tax liability.
  
• Applies to all corporate taxpayers irrespective of their turnover.
  
• The interest is computed on the assessed tax minus advance tax and TDS.
  
• Assessed tax includes total tax payable after deductions and rebates.
  
• Payment of interest is mandatory and not subject to waiver.
  

Overview of Section 234C

• Section 234C imposes interest for deferment or non-payment of scheduled advance tax instalments.
  
• Companies are required to pay advance tax in four instalments.
  
• Interest is charged at 1 percent per month for shortfall in each instalment.
  
• Each shortfall is computed individually for June, September, December, and March instalments.
  
• This interest is fixed and not dependent on the date of actual payment.
  

Applicability of Section 234C

• Applicable when instalments are not paid as per prescribed percentages.
  
• The percentages are 15 percent, 45 percent, 75 percent, and 100 percent of total advance tax.
  
• Short payment or delayed payment in any quarter triggers interest.
  
• Interest is calculated on the shortfall amount for a specific number of months.
  
• March instalment interest is charged for only one month.
  

Key Differences and Compliance

• Section 234B deals with total shortfall in advance tax at year-end.
  
• Section 234C applies to quarterly payment defaults during the year.
  
• Both sections impose interest independently and cumulatively.
  
• Proper estimation and timely payment of advance tax avoids these charges.
  

Interest under both sections must be included in self-assessment tax payments.