Income Tax return: Did you delay in ITR filing, payment, advance tax? Get ready to pay these charges

Paying income tax is the responsibility of every Indian citizen, who has a salaried income or income from other sources. And, to make sure you follow the norms of the Income Tax Act, the department ensures that penalties are levied when any delay or default occurs. There are three section namely 234A, 234B and 234C which decide how much extra interest will be levied in these situations. These are - delay in filing the return of income, non-payment or short payment of advance tax and non-payment or short payment of individual installment or installments of advance tax (i.e., deferment of advance tax).  

In section 234A, interest is levied for delay in filing the return of income. Simply put, if a taxpayer files the return of income after the due date specified in this regard, interest under section 234A will be levied. Interest levied under section 234A stands currently at 1% per month or part of a month. The nature of interest is simple interest. In other words, the taxpayer is liable to pay simple interest at 1% per month or part of a month for delay in filing the return of income.

Section  234B provides for levy of interest for default in payment of advance tax. According to IT department, interest under section 234B is levied in following two cases. They are: 

- When the taxpayer has failed to pay advance tax though he is liable to pay advance tax; or

- Where the advance tax paid by the taxpayer is less than 90% of the assessed tax (meaning of assessed tax is discussed later). 

A taxpayer must know that under Section 208 of the Act, advance tax shall be payable  during the financial year if estimated tax liability of assessee during that year is Rs 10,000 or more. Just like section 234A, under section 234B, interest for default in payment of advance tax is also levied at 1% per month or part of a month. 

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Meanwhile, under section 234C provides for levy of interest for default in payment of instalment(s) of advance tax. Here also interest of 1% is levied. Interest under section 234C is levied, if advance tax paid in any instalment(s) is less than the required amount. However, there are two cases of how this section levies interest on your default, as per the department.

In case of taxpayers (other than those who opted for presumptive taxation scheme under section 44AD or section 44ADA), interest shall be levied- 

• If advance tax paid on or before 15th June is less than 12% of advance tax payable
• If advance tax paid on or before 15th September is less than 36% of advance tax payable
• If advance tax paid on or before 15th December is less than 75% of advance tax payable
• If advance tax paid on or before 15th March is less than 100% of advance tax payable

In case of taxpayers who opted for presumptive taxation scheme of Section 44AD or section 44ADA interest shall be levied if advance tax paid on or before 15th March is less than 100% of advance tax payable.