GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF DIRECT TAXES (CBDT)
NEW DELHI
DEPARTMENT OF REVENUE
CENTRAL BOARD OF DIRECT TAXES (CBDT)
NEW DELHI
CIRCULAR
NO. 2/2015, Dated: February 10, 2015
Subject: Chargeability of
Interest under Section 234A of the Income-tax Act, 1961 on self-assessment tax
paid before the due date of filing of return of income-regarding
Interest under Section 234A of the Income-tax Act, 1961
(hereinafter the Act) is charged in case of default in furnishing return of
income by an assessee. The interest is charged at the specified rate on the
amount of tax payable on the total income, as reduced by the amount of advance tax,
TDS/TCS, any relief of tax allowed under section 90 and section 90A, any
deduction allowed under section 91 and any tax credit allowed in accordance
with the provisions of section 115JAA and section 115JD of the Act. Since
self-assessment tax is not mentioned as a component of tax to be reduced from
the amount on which interest under section 234A of the Act is chargeable,
interest is being charged on the amount of self-assessment tax paid by the
assessee even before the due date of filing of return.
2. It has been held by
the Hon’ble Supreme Court in the case of CIT vs Prannoy Roy, 309 ITR 231
(2009) that the interest under section 234A of the Act on
default in furnishing return of income shall be payable only on the amount of
tax that has not been deposited before the due date of filing of the income-tax
return for the relevant assessment year. Accordingly, the present practice of
charging interest under section 234A of the Act on self-assessment tax paid
before the due date of filing return was reviewed by CBDT.
3. The Board has decided that no interest under
section 234A of the Act is chargeable on the amount of self-assessment tax paid
by the assessee before the due date of filing of return of income.
4. This Circular may be brought to the notice of
all officers for compliance.
5. Hindi version shall follow.
F. No. 385/03/2015-IT(B)
(Sandeep Singh)
Under Secretary to Government of India
Under Secretary to Government of India
