Section 234B:
Interest for defaults in payment of advance tax: This penalty provision activates in two cases:
1. If the assesse was liable to pay advance tax, but failed to deposit that.
2. If the amount deposited was less than 90% of the tax to be deposited.
In both the above cases, assesse will be levied a Simple Interest @ 1% per month or part of the month. Please remember, if you deposited the advance tax which was more than 90% of the total tax, then no interest will be charged from you. This interest is chargeable from 1st April of the Assessment Year. It can also be charged from the initiation date of assessment year to the date of determination of total income under sub-section (1) of section 143 and where a regular assessment is made, to the date of such regular assessment, on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax.
