No interest under section 234A of the Income Tax Act is chargeable on the amount of self-assessment tax paid before the due date of return filing

CIRCULAR NO 02/2015 No. 385/03/2015-IT(B)

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 234Aof 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 234Aof 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.

(Sandeep Singh)

Under Sec­re­tary to Gov­ern­ment of India