Section 234A:
Interest for defaults in furnishing return of income.
1(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 2
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,
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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 4
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.
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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
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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 8
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 9
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 10
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 11
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.
Notes:
1. Ins. by s. 94, ibid. (w.e.f. 1-4-1989).
2. 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).
3. 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).
4. Ins. by Act 23 of 2012, s. 85 (w.e.f. 1-4-2013).
5. Subs. by Act 3 of 1989, s. 38, for Explanation (w.e.f. 1-4-1989).
6. Subs. by Act 32 of 2003, s. 89, for under section 147 (w.e.f. 1-6-2003).
7. Explanation omitted by Act 14 of 2001, s. 78 (w.r.e.f. 1-4-1989).
8. Ins. by Act 3 of 1989, s. 38 (w.e.f. 1-4-1989).
9. 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).
10. Ins. by 32 of 2003, s. 89 (w.e.f 1-6-2003).
11. 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).
12. The Explanation omitted by s. 38, ibid. (w.e.f. 1-4-1989).