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Income Tax efiling in India for FY 2023-24 (AY 2024-25)

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Interest Established in the IT Department - Section 234B

Interest under section 234B is reduced by 0.75% per month between 1 April 2020 and 30 June 2020. Missed or lost opportunity can lead to legal consequences and regrets when it comes to tax compliance. This is the second part of a 3-part series on interest rates imposed by the Department of Taxation. Section 234B deals with fines and penalties that the Department of Revenue can charge in the event of an error. A legal obligation under section 234B may also arise when there is a delay in payment of taxes. See our guidelines for interests under Section 234A and Section 234C.

What is Advance Tax

If you have to pay Rs 10,000 or more in taxes for a financial year, prepaid taxes may apply to you. Advance Tax means paying your taxes on the due dates provided by the revenue department. If you do not pay your taxes in advance or you do not pay in full, you may be liable to pay interest under section 234B.

Frequently asked questions

Interest under section 234B applies where: Your tax debt after deducting TDS in the financial year is over Rs 10,000 and you have not paid any taxes in advance. OR You have paid in advance, but prepaid taxes are less than 90% of the 'checked tax'. In any of the above cases, interest under section 234B will apply. Interest is calculated at 1% in Assessed Tax under Advance Tax. Half a month is shortened to a full moon. Interest rates are also abbreviated in such a way that any fraction of a hundred is ignored.

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