law: The Income-Tax Act, 1961
  E.-Tax payable under provisional assessment
  234. [Tax paid by deduction or advance payment.]- Omitted by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), s. 126 (w.e.f. 1-4-1989).
  2[F.-Interest chargeable in certain cases
  234A. Interest for defaults in furnishing return of income.-
  (1) Where the return of income for any assessment year under sub-section (1) or sub-section (4) of section 139, or in response to a notice under sub-section (1) of section 142, is furnished after the due date, or is not furnished, the assessee shall be liable to pay simple interest at the rate of 3[one per cent.] for every month or part of a month comprised in the period commencing on the date immediately following the due date, and,-
  (a) where the return is furnished after the due date, ending on the date of furnishing of the return; or
  (b) where no return has been furnished, ending on the date of completion of the assessment under section 144, 4[on the amount of the tax on the total income as determined under sub-section (1) of section 143, and where a regular assessment is made, on the amount of the tax on the total income determined under regular assessment, as reduced by the amount of,-
  (i) advance tax, if any, paid;
  (ii) any tax deducted or collected at source;
  (iii) any relief of tax allowed under section 90 on account of tax paid in a country outside India;
  (iv) any relief of tax allowed under section 90A on account of tax paid in a specified territory outside India referred to in that section;
  (v) any deduction, from the Indian income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and
  (vi) any tax credit allowed to be set off in accordance with the provisions of section 115JAA 1[or section 115JD].]
  Explanation 1.-In this section, "due date" means the date specified in sub-section (1) of section 139 as applicable in the case of the assessee.
  2[Explanation 2.-In this sub-section, "tax on the total income as determined under sub-section (1) of section 143" shall not include the additional income-tax, if any, payable under section 143.]
  Explanation 3.-Where, in relation to an assessment year, an assessment is made for the first time 3[under section 147 or section 153A], the assessment so made shall be regarded as a regular assessment for the purposes of this section.
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  (2) The interest payable under sub-section (1) shall be reduced by the interest, if any, paid under section 140A towards the interest chargeable under this section.
  (3) Where the return of income for any assessment year, required 3[by a notice under section 148 or section 153A] issued 5[after the determination of income under sub-section (1) of section 143 or] after the completion of an assessment under sub-section (3) of section 143 or section 144 or section 147, is furnished after the expiry of the time allowed under such notice, or is not furnished, the assessee shall be liable to pay simple interest at the rate of 6[one per cent.] for every month or part of a month comprised in the period commencing on the day immediately following the expiry of the time allowed as aforesaid, and,-
  (a) where the return is furnished after the expiry of the time aforesaid, ending on the date of furnishing the return; or
  (b) where no return has been furnished, ending on the date of completion of the reassessment or recomputation under section 147 7[or reassessment under section 153A], on the amount by which the tax on the total income determined on the basis of such reassessment or recomputation exceeds the tax on the total 8[income determined under sub-section (1) of section 143 or on the basis of the earlier assessment aforesaid].
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  (4) Where as a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount of tax on which interest was payable under sub-section (1) or sub-section (3) of this section has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and-
  (i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly;
  (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded.
  (5) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.]
  2. Ins. by s. 94, ibid. (w.e.f. 1-4-1989).
  3. Subs. by Act 54 of 2003, s. 12, for "one and one-fourth per cent." (w.e.f. 8-9-2003). Earlier substitution by Act 27 of 1999, s. 81 (w.e.f. 1-6-1999).
  4. Subs. by Act 21 of 2006, s. 48, for "on the amount of the tax on the total income as determined under sub-section (1) of section 143 or on regular assessment as reduced by the advance tax, if any, paid and any tax deducted or collected at source" (w.e.f. 1-4-2007).Earlier were amended by 3 of 1989, s. 38 (w.e.f. 1-4-1989).
  1. Ins. by Act 23 of 2012, s. 85 (w.e.f. 1-4-2013).
  2. Subs. by Act 3 of 1989, s. 38, for Explanation (w.e.f. 1-4-1989).
  3. Subs. by Act 32 of 2003, s. 89, for "under section 147" (w.e.f. 1-6-2003).
  4. Explanation omitted by Act 14 of 2001, s. 78 (w.r.e.f. 1-4-1989).
  5. Ins. by Act 3 of 1989, s. 38 (w.e.f. 1-4-1989).
  6. Subs. by Act 54 of 2003, s. 12, for "one and one-fourth per cent." (w.e.f. 8-9-2003).Earlier substitution by Act 27 of 1999, s. 81 (w.e.f. 1-6-1999).
  7. Ins. by 32 of 2003, s. 89 (w.e.f 1-6-2003).
  8. Subs. by Act 3 of 1989, s. 38, for "income determined on the basis of the earlier assessment aforesaid" (w.e.f. 1-4-1989).
  9. The Explanation omitted by s. 38, ibid. (w.e.f. 1-4-1989).
  234B. Interest for defaults in payment of advance tax.-
  (1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent. of the assessed tax, the assessee shall be liable to pay simple interest at the rate of 1[one per cent.] for every month or part of a month comprised in the period from the 1st day of April next following such financial year 2[to the date of determination of total income under sub-section (1) of section 143 3[and where a regular assessment is made, to the date of such regular assessment, on an amount]] equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax.
  4[Explanation 1.-In this section, "assessed tax" means the tax on the total income determined under sub-section (1) of section 143 and where a regular assessment is made, the tax on the total income determined under such regular assessment as reduced by the amount of,-
  (i) any tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income;
  (ii) any relief of tax allowed under section 90 on account of tax paid in a country outside India;
  (iii) any relief of tax allowed under section 90A on account of tax paid in a specified territory outside India referred to in that section;
  (iv) any deduction, from the Indian income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and
  (v) any tax credit allowed to be set off in accordance with the provisions of section 115JAA 5[or section 115JD].]
  Explanation 2.-Where, in relation to an assessment year, an assessment is made for the first time 6[under section 147 or section 153A], the assessment so made shall be regarded as a regular assessment for the purposes of this section.
  7[Explanation 3.-In Explanation 1 and in sub-section (3) "tax on the total income determined under sub-section (1) of section 143" shall not include the additional income-tax, if any, payable under section 143.]
  (2) Where, before the date of 8[determination of total income under sub-section (1) of section 143 or] completion of a regular assessment, tax is paid by the assessee under section 140A or otherwise,-
  (i) interest shall be calculated in accordance with the foregoing provisions of this section up to the date on which the tax is so paid, and reduced by the interest, if any, paid under section 140A towards the interest chargeable under this section;
  (ii) thereafter, interest shall be calculated at the rate aforesaid on the amount by which the tax so paid together with the advance tax paid falls short of the assessed tax.
  1[(2A) (a) where an application under sub-section (1) of section 245C for any assessment year has been made, the assessee shall be liable to pay simple interest at the rate of one per cent. for every month or part of a month comprised in the period commencing on the 1st day of April of such assessment year and ending on the date of making such application, on the additional amount of income-tax referred to in that sub-section;
  (b) where as a result of an order of the Settlement Commission under sub-section (4) of section 245D for any assessment year, the amount of total income disclosed in the application under sub-section (1) of section 245C is increased, the assessee shall be liable to pay simple interest at the rate of one per cent. for every month or part of a month comprised in the period commencing on the 1st day of April of such assessment year and ending on the date of such order, on the amount by which the tax on the total income determined on the basis of such order exceeds the tax on the total income disclosed in the application filed under sub-section (1) of section 245C;
  (c) where, as a result of an order under sub-section (6B) of section 245D, the amount on which interest was payable under clause (b) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly;]
  2[(3) where, as a result of an order of reassessment or recomputation under section 147 or section 153A, the amount on which interest was payable in respect of shortfall in payment of advance tax for any financial year under sub-section (1) is increased, the assessee shall be liable to pay simple interest at the rate of one per cent. for every month or part of a month comprised in the period commencing on the 1st day of April next following such financial year and ending on the date of the reassessment or recomputation under section 147 or section 153A, on the amount by which the tax on the total income determined on the basis of the reassessment or recomputation exceeds the tax on the total income determined under sub-section (1) of section 143 or on the basis of the regular assessment as referred to in sub-section (1), as the case may be;]
  (4) where, as a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 3***, the amount on which interest was payable under sub-section (1) or sub-section (3) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and-
  (i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly;
  (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded;
  (5) the provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.]
  1. Subs. by Act 54 of 2003, s. 13, for "one and one-fourth per cent." (w.e.f. 8-9-2003).
  2. Subs. by Act 3 of 1989, s. 39, for "to the date of the regular assessment" (w.e.f. 1-4-1989).
  3. Subs. by Act 22 of 1995, s. 42, for "or regular assessment, on an amount" (w.e.f. 1-4-1989).
  4. Subs. by Act 21 of 2006, s. 49, for Explanation 1 (w.e.f. 1-4-2007).
  5. Ins. by Act 23 of 2012, s. 86 (w.e.f. 1-4-2013).
  6. Subs. by Act 32 of 2003, s. 90, for "under section 147" (w.e.f. 1-6-2003).
  7. Subs. by Act 3 of 1989, s. 39, for Explanation 3 (w.e.f.1-4-1989).
  8. Ins. by s. 39, ibid (w.e.f. 1-4-1989).
  1. Ins. by Act 20 of 2015, s. 57 (w.e.f. 1-6-2015).
  2. Subs. by s. 57, ibid., for sub-section (3) (w.e.f. 1-6-2015).
  3. The words, brackets, figures and letter "or an order of the Settlement Commission under sub-section (4) of section 245D" omitted by s. 57, ibid (w.e.f. 1-6-2015).
  234C. Interest for deferment of advance tax.-
  1[(1) Where in any financial year,-
  2[(a) an assessee, other than 3[the assessee referred to in clause (b)], who is liable to pay advance tax under section 208 has failed to pay such tax or-
  (i) the advance tax paid by such assessee on its current income on or before the 15th day of June is less than fifteen per cent. of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of September is less than forty-five per cent. of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than seventy-five per cent. of the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one per cent. per month for a period of three months on the amount of the shortfall from fifteen per cent or forty-five per cent. or seventy-five per cent., as the case may be, of the tax due on the returned income;
  (ii) the advance tax paid by the assessee on the 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:]
  Provided that 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) 4[5[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:]
  6[Provided that nothing contained in this sub-section shall apply to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of under-estimate or failure to estimate-
  (a) the amount of capital gains; or
  (b) income of the nature referred to in sub-clause (ix) of clause (24) of 7[section 2; or]
  8[(c) income under the head "Profits and gains of business or profession" in cases where the income accrues or arises under the said head for the 9[first time; or]]
  10[(d) income of the nature referred to in sub-section (1) of section 115BBDA,] and the assessee has paid the whole of the amount of tax payable in respect of income referred to in clause (a) 1[or clause (b) or clause (c) 2[or clause (d)]], as the case may be, had such income been a part of the total income, as part of the 3[remaining instalments of advance tax which are due or where no such instalments are due], by the 31st day of March of the financial year:]
  4[Provided further that nothing contained in this sub-section shall apply to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of increase in the rate of surcharge under section 2 of the Finance Act, 2000 (10 of 2000), as amended by the Taxation Laws (Amendment) Act, 2000 (1 of 2001), and the assessee has paid the amount of shortfall, on or before the 15th day of March, 2001 in respect of the instalment of advance tax due on the 15th day of June, 2000, the 15th day of September, 2000 and the 15th day of December, 2000:]
  5[Provided also that nothing contained in this sub-section shall apply to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of increase in the rate of surcharge under section 2 of the Finance Act, 2000 (10 of 2000) as amended by the Taxation Laws (Amendment) Act, 2001 (4 of 2001) and the assessee has paid the amount of shortfall on or before the 15th day of March, 2001 in respect of the instalment of advance tax due on the 15th day of June, 2000, the 15th day of September, 2000 and 15th day of December, 2000.]
  6[Explanation.-In this section, "tax due on the returned income" means the tax chargeable on the total income declared in the return of income furnished by the assessee for the assessment year commencing on the 1st day of April immediately following the financial year in which the advance tax is paid or payable, as reduced by the amount of,-
  (i) any tax deductible or collectible at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income;
  (ii) any relief of tax allowed under section 90 on account of tax paid in a country outside India;
  (iii) any relief of tax allowed under section 90A on account of tax paid in a specified territory outside India referred to in that section;
  (iv) any deduction, from the Indian income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and
  (v) any tax credit allowed to be set off in accordance with the provisions of section 115JAA 7[or section 115JD].]
  (2) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.]]
  1. Subs. by Act 32 of 1994, s. 45, for certain words (w.e.f. 1-4-1995).
  2. Subs. by Act 28 of 2016, s. 91, for clause (a) (w.e.f. 1-6-2016).
  3. Subs. by Act 7 of 2017, s. 75, for "an eligible assessee in respect of the eligible business referred to in section 44AD" (w.e.f. 1-4-2017).
  4. Subs. by Act 28 of 2016, s. 91, for certain words (w.e.f. 1-6-2016).
  5. Subs. by Act 7 of 2017, s. 75, for "an eligible assessee in respect of the eligible business referred to in section 44AD" (w.e.f. 1-4-2017).
  6. Ins. by Act 3 of 1989, s. 40 (w.e.f. 1-4-1989).
  7. Subs. by Act 28 of 2016, s. 91, for "section 2" (w.e.f. 1-6-2016).
  8. Ins. by s. 91, ibid. (w.e.f. 1-6-2016).
  9. Subs. by Act 7 of 2017, s. 75, for "first time," (w.e.f. 1-4-2017).
  10. Ins. by s. 75, ibid (w.e.f. 1-4-2017).
  1. Subs. by Act 28 of 2016, s. 91, for "or clause (b)" (w.e.f. 1-6-2016).
  2. Ins. by Act 7 of 2017, s. 75 (w.e.f. 1-4-2017).
  3. Subs. by Act 33 of 1996, s. 54, for "instalment of advance tax which is immediately due or where no such instalment is so due" (w.e.f. 1-4-1997).
  4. Ins. by Act 1 of 2001, s. 4 (w.e.f. 4-1-2001).
  5. Ins. by Act 4 of 2001, s. 7 (w.e.f 3-2-2001).
  6. Subs. by Act 21 of 2006, s. 50, for the Explanation (w.e.f. 1-4-2007).
  7. Ins. by Act 23 of 2012, s. 87 (w.e.f. 1-4-2013).
  1[234D. Interest on excess refund.-
  (1) Subject to the other provisions of this Act, where any refund is granted to the assessee under sub-section (1) of section 143, and-
  (a) no refund is due on regular assessment; or
  (b) the amount refunded under sub-section (1) of section 143 exceeds the amount refundable on regular assessment, the assessee shall be liable to pay simple interest at the rate of 2[one-half per cent.] on the whole or the excess amount so refunded, for every month or part of a month comprised in the period from the date of grant of refund to the date of such regular assessment.
  (2) Where, as a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount of refund granted under sub-section (1) of section 143 is held to be correctly allowed, either in whole or in part, as the case may be, then, the interest chargeable, if any, under sub-section (1) shall be reduced accordingly.
  3[Explanation 1].- Where, in relation to an assessment year, an assessment is made for the first time under section 147 or section 153A, the assessment so made shall be regarded as a regular assessment for the purposes of this section.]
  4[Explanation 2.-For the removal of doubts, it is hereby declared that the provisions of this section shall also apply to an assessment year commencing before the 1st day of June, 2003 if the proceedings in respect of such assessment year is completed after the said date.]
  1. Ins. by Act 32 of 2003, s. 91 (w.e.f. 1-6-2003).
  2. Subs. by Act 54 of 2003, s. 15, for "two-third per cent." (w.e.f. 8-9-2003).
  3. The Explanation numbered as Explanation 1 by Act 23 of 2012, s. 88 (w.e.f. 1-6-2003).
  4. Ins. by s. 88, ibid. (w.e.f. 1-6-2003).
  5[G.-Levy of fee in certain cases
  234E. Fee for default in furnishing statements.-
  (1) Without prejudice to the provisions of the Act, where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.
  (2) The amount of fee referred to in sub-section (1) shall not exceed the amount of tax deductible or collectible, as the case may be.
  (3) The amount of fee referred to in sub-section (1) shall be paid before delivering or causing to be delivered a statement in accordance with sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C.
  (4) The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.]
  5. Ins. by s. 89, ibid. (w.e.f. 1-7-2012).
  1[234F. Fee for default in furnishing return of income.-
  (1) Without prejudice to the provisions of this Act, where a person required to furnish a return of income under section 139, fails to do so within the time prescribed in sub-section (1) of the said section, he shall pay, by way of fee, a sum of,-
  (a) five thousand rupees, if the return is furnished on or before the 31st day of December of the assessment year;
  (b) ten thousand rupees in any other case:
  Provided that if the total income of the person does not exceed five lakh rupees, the fee payable under this section shall not exceed one thousand rupees.
  (2) The provisions of this section shall apply in respect of return of income required to be furnished for the assessment year commencing on or after the 1st day of April, 2018.]
  1. Ins. by Act 7 of 2017, s. 76 (w.e.f. 1-4-2018).