Section

Amount on which interest payable

Rate of interest

Period of interest

SECTION 115P — Failure to pay the whole or any part of the tax on distributed profits of domestic companies (i.e., dividend) referred u/s. 115-O(1).

Amount of tax not paid on distributed profits remaining unpaid.

w.e.f 8-9-2003 Simple interest @ 1% for every month or part thereof.

From the day immediately following the last date on which the dividend distribution tax was to be paid to the date of actual payment.

SECTION 115S — Failure to pay the whole or any part of the tax on income distributed by Unit Trust of India/Mutual Fund referred u/s. 115R(1) or (2)

Amount of tax not paid on income distributed remaining unpaid.

w.e.f. 8-9-2003 Simple interest @ 1% for every month or part thereof

From the day immediately following the last date on which the income distribution tax was to be paid to the date of actual payment.

SECTION 158BFA(1) — (a) Delay or failure in furnishing the return of total income including undisclosed income for the block period as required by notice u/s. 158BC(a) OR (b) Undisclosed Income determined by the Assessing Officer is in excess of the income shown in such return.

Undisclosed income determined u/s. 158BC(c).

w.e.f. 8.9.2003 Simple interest @ 1% per month or part thereof.

(Not applicable w.e.f. 31/05/2003)

SECTION 201(1A) — Failure to deduct whole or any part of tax deducted at source or failure to deposit tax deducted at source

(a) Amount of tax not deducted or

(b) from the date of deduction of TDS to the date of deposit/Payment of TDS Interest Payable will be one and half per cent per month or part of month

From the date, on which the tax was to be deductible/deducted, to the date of actual payment.

(b) having deducted the tax, paid after due date

Tax Deducted but deposited from the date of deduction of TDS to the date of deposit/Payment of TDS Interest Payable will be one and half per cent per month or part of month

SECTION 206C(7) — Failure to collect tax at source or failure to deposit the same after collection at source

w.e.f. 8-9-2003 simple interest @ 1% per month or part thereof

From the date, on which the tax was to be collected, to the date of actual payment.

SECTION 220(2) — Failure to pay the Amount specified in notice of demand u/s 156 or delay to pay the demand issued u/s 156

Amount of tax demanded as per notice u/s. 156.

w.e.f. 8-9-2003 simple interest @ 1% per month or part thereof

From the day next following the day on which period specified in notice expires till the date of actual payment of specified amount.

SECTION 234A(1) — Delay or failure to furnish return of income u/s. 139(1)/139(4)/ 142(1)

6) and any tax credit allowed to be set off in accordance with the provisions of Section 115JAA.

From the date immediately following the due date to the date on which return is furnished or on the date on which best judgment assessment u/s. 144 is completed.

SECTION 234A(3) — Failure to furnish return required by a notice u/s. 148 within time allowed or failure to furnish the return.

Difference between tax determined on reassessment and tax determined on earlier assessment.

From the expiry of time allowed furnishing the return u/s. 148/153A to the date of furnishing of return or where no return is filed to the date of completion of reassessment.

SECTION 234B(1) — Failure to pay advance tax in entirety or (2) Where advance tax paid falls short of 90% of assessed tax

i) TDS or TCS;

ii) any relief of tax allowed u/s. 90 on account of tax paid in a country outside India;

iii) any relief of tax allowed u/s. 90A on account of tax paid in a specified territory outside India referred to in that section;

iv) any deduction, from the Indian Income-Tax payable, allowed u/s. 91, on account of tax paid in a country outside India;

v) and any tax credit allowed to be set off in accordance with the provisions of Section 115JAA. or

w.e.f. 8-9-2003 Simple interest @ 1% per month or part thereof.

From 1st April of the relevant Assessment Year to the date of determination of income u/s. 143(1) or date of regular assessment if such assessment is made.

SECTION 234B(3) — Where the amount on which interest is payable u/s. 234B(1) is increased as a result of reassessment u/s. 147

Difference between tax determined on reassessment and tax determined on earlier assessment

w.e.f. 8-9-2003 Simple interest @ 1% per month or part thereof.

SECTION 234C — Shortfall/ failure to pay advance tax or Deferment of advance tax

Amount of tax not paid or shortfall in payment during various installments. [Tax on returned income is considered]. If capital gain arises after any due date of installment, tax on capital gain shall be paid in balance available installments due after the date of gain.

However interest under this section shall not be levied in respect of shortfall of advance tax on account of capital gains or winnings from races, lotteries, etc. if assessee has paid the advance tax as a part of remaining installments of advance tax due if any or by 31st March of the Financial Year.

SECTION 234D — Where refund granted on assessment u/s. 143(1) is found to be not due on regular assessment or refund granted is in excess of refund determined on regular assessment.

Whole of the amount so refunded or excess amount so refunded

From the date of grant of refund u/s. 143(1) to the date of regular assessment.

INTEREST RECEIVABLE BY ASSESSEE

SECTION 244A
(a) Where refund arises as result of excess payment of advance tax or higher TCS or TDS or Advance Fringe Benefit Tax, provided the said amount is not less than 10% of tax determined u/s 115WE (1) or 143(1) or on regular assessment.

from 1st April of relevant Assessment Year to the date on which the refund is granted and

(b) Refund arises in any other case. However such refund should not be less than 10% of tax determined.

Amount of refund due

w.e.f. 8-9-2003 Simple interest @ 0.50% per month or part thereof.

from the date of payment of tax or penalty to the date on which refund is granted.

1. It is important to note that Rule 119A governs the manner of charging of interest and as per the said rule

1. fraction of month is to be ignored when annual rate is prescribed,

2. fraction of a month is to be considered as full month where monthly rate is provided and

3. amount of tax, penalty or any other sum in respect of which interest is calculated is rounded of to the nearest multiple of Rs. 100/- and for this purpose any fraction of Rs. 100/- is ignored.

2. In certain circumstances, the assessee may approach CIT or CCIT for reduction or waiver of interest levied u/s. 220(2), 234A, 234B and 234C.