🔒

^®

Subscribe Free GST updates on...

Subscribe to Best GST Library of India and get ahead of the rest. Click here for plans.

CBDT Clarifies: Interest u/s 234A shall not be levied on self assessment tax paid before the due date of filing return

CIRCULAR NO. 2/2015 [F.NO.385/03/2015-IT(B), DATED 10-2-2015

Interest under section 234A of the Income-tax Act, 1961 (hereinafter the Act) is charged in case of default in furnishing return of income by an assessee. The interest is charged at the specified rate on the amount of tax payable on the total income, as reduced by the amount of advance tax, TDS/TCS, any relief of tax allowed under section 90 and section 90A, any deduction allowed under section 91 and any tax credit allowed in accordance with the provisions of section 115JAA and section 115JD of the Act. Since self-assessment tax is not mentioned as a component of tax to be reduced from the amount on which interest under section 234A of the Act is chargeable, interest is being charged on the amount of self-assessment tax paid by the assessee even before the due date of filing of return.

2. It has been held by the Hon'ble Supreme Court in the case of CIT v. Prannoy Roy, 309 ITR 231 (2009) that the interest under section 234A of the Act on default in furnishing return of income shall be payable only on the amount of tax that has not been deposited before the due date of filing of the income-tax return for the relevant assessment year. Accordingly, the present practice of charging interest under section 234A of the Act on self-assessment tax paid before the due date of filing return was reviewed by CBDT.
 

3. The Board has decided that no interest under section 234A of the Act is chargeable on the amount of self-assessment tax paid by the assessee before the due date of filing of return of income.
 

4. This Circular may be brought to the notice of all officers for compliance.

We welcome the clarificatory circular. It was long overdue. It is suggested that any rectification applications pending in this respect should be disposed off quickly. Since many returns are now being filed online, the system should also be updated immediately to calculate the interest u/s 234A in accordance with the circular.

Govt defers implementation of Special Registration, Return Filing For Pan Masala, Gutkha Companies till May 15.

By: TaxReply on Apr 12, 2024

Amid GST portal deficiency, GSTN recommends extension of GSTR-1 due date for the month of March.

By: TaxReply on Apr 12, 2024

CBIC waives interest for specified taxpayers for late filing of GSTR-3B due to portal technical glitches during specified months.

By: TaxReply on Apr 9, 2024

GSTN requests taxpayers to check their email and refile their GSTR-3B within 15 days from date of email.

By: TaxReply on Apr 9, 2024

GSTN Advisory on new feature of Auto-population of HSN summary from e-Invoices to GSTR-1

By: TaxReply on Apr 9, 2024