Interest payable for non filing of Income-tax return (Section 234A)

Skorydov Tax Team

Updated July 10, 2016 20:39

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Income-tax return for F.Y. 2015-16 is required to be filed within the following due dates-

Particulars	Due date
Company	30th November
Taxpayer who is having Tax audit for his business	30th November
Other taxpayers	31st July

If the Income-tax return is not filed within these due dates, taxpayer is required to pay an additional interest before filing his Income-tax return.

Other key points for Interest U/s. 234A:-

Interest is payable at 1% of the tax liability.
The period for which interest is calculated will start immediately from the due date and end on the date of filing of return.
Tax liability is calculated as follows-

Particulars	Amount
Tax payable on total income	XXX
Less: Amount of Advance tax paid	XXX
Tax deducted at source	XXX
Tax relief, if any	XXX
Credit of Alternate Minimum Tax	XXX
= Tax Liability	XXX

This interest is compulsory. Hence it cannot be reduced or waived by any Income-tax authority.
If the taxpayer fails to file his return within due date, interest U/s. 234A is charged automatically. Hence, Income-tax department is not required to intimate taxpayer about payment of this interest.
This interest is charged if taxpayer fails to file his return within due date, however if taxpayer has paid all his taxes before the due date but files his return after the due date then interest U/s. 234A shall not be charged. The logic behind this is no tax was payable by the taxpayer at the time of filing of return hence no interest is levied.