Interest for default in furnishing return of income [Section 234A] :
(1) Interest under section 234A is attracted for failure to file a return of income on or before the due date mentioned above i.e. interest is payable where an assessee furnishes the return of income after the due date or does not furnish the return of income.
(2) Simple interest @1% per month or part of the month is payable for the period commencing from the date immediately following the due date and ending on the following dates –
| Circumstances | Ending on the following dates |
| Where the return is furnished after due date | the date of furnishing of the return |
| Where no return is furnished | the date of completion of assessment |
(3) The interest has to be calculated on the amount of tax on total income as determined under section 143(1) or on regular assessment as reduced by the advance tax paid and any tax deducted or collected at source.
Note – Section 143(1) provides that if any tax or interest is found due on the basis of a return of income after adjustment of advance tax, tax deducted at source and self-assessment tax, an intimation would be sent to the assessee and such intimation is deemed to be a notice of demand issued under section 156. If any refund is due on the basis of the return, it shall be granted to the assessee and an intimation to this effect would be sent to the assessee. Where no tax or refund is due, the acknowledgement of the return is deemed to be an intimation under section 156.