Section 234A: Interest Penalty for late filing of ITR

By Hiral Vakil on March 7, 2019

In case of delay in filing the return, a taxpayer will be liable to pay interest @ 1% of tax liability per month or part thereof.

A scenario of interest calculation u/s 234A

Arpan is an engineer. The due date for filing ITR is 31st August 2016. However, he filed it on 8th December 2016. His tax liability as per tax rates come to Rs. 10,550.

In this case, as Arpan filed his ITR after the due date, 1% of his total tax liability will be added for each month of delay, as interest under Section 234A.

So total interest amount = Rs. 105.5 x 4 (interest to be calculated for four months) = Rs. 422

So now Arpan will have to pay 10,550 (tax) + 422 (interest) = Rs. 10,972