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Interest on Delayed Income Tax Return Filing - Section 234A


Section 234a of Income Tax Act:  interest for delay in filing of income tax return

Section 234A of the Income Tax Act in India plays a pivotal role in shaping the financial responsibilities of taxpayers. It addresses the repercussions of  delayed filing of income tax returns and imposes interest on the outstanding tax amount. This blog aims to provide a comprehensive understanding of Section 234A, covering its key aspects, calculations, applicability, and the significance of filing tax returns within the stipulated time frame.

 

Table of Content

 

What is Section 234A

Section 234A of the Income Tax Act in India pertains to the interest payable by taxpayers for the delay in filing their income tax returns. 

Section 234A of the Income Tax Act in India pertains to the interest payable by a taxpayer for delay in filing income tax returns. The section deals with the computation of interest on the amount of tax that is due but remains unpaid after the specified due date for filing the income tax return.


The key points regarding Section 234a of Income Tax Act are:


The key points regarding Section 234a of Income Tax Act are:

1. Applicability: This section applies when taxpayers fail to file their income tax return, and there's a tax payable by the taxpayer by the due date specified under under Section 139(1) of the Income Tax Act.


2. Interest Calculation: Interest is calculated on the amount of tax due at a simple interest rate of 1% per month or part of a month for the period of delay.


3. Due Date: The due date for filing income tax returns is generally July 31st of the assessment year for individuals. However, this due date may vary, and it is important to check the specific due date applicable for a particular assessment year.


It's essential for taxpayers to be aware of the due dates for filing their income tax returns and to comply with them to avoid the imposition of interest under Section 234A. The interest is meant to compensate the government for the delay in receiving tax payments.


Penalties under section 234


Penalties under section 234 - Taxbuddy

Penalties under this section, commonly referred to as defaults in furnishing income, are applicable in the following scenarios:


1. Failure to pay taxes on time.

2. Neglecting to furnish FORM 16 to the current employer after changing companies.

3. Non-compliance with taxation rules.


In the event of these lapses, individuals are subject to interest payments und