Process of charging interest under section 234 of IT Act
Income Tax Act as a statute:
Income Tax Act 1961 ( as amended by the Finance Act,2012) is the mother statute for levying Income Tax in India. It is the charging statute for Income Tax in India. It provides for collection and recovery of Income tax. The Act has been amended many times till date. Though subject to many critisisms it is changing with the lapse of time. It isa consolidated Act dealing with the provisions relating to mode of charging for different artificial persons.
OBJECTIVES OF INCOME TAX:
The primary purpose of income tax is to raise fund for governmental operations. Hence it is one the most important statutes prevailing in India from financial point of view.
SCOPE OF THE INCOME TAX ACT:
The Income Tax Act deals with the mode of taxation for firms,individuals,societies,Hindu Undivided Family and other artificial persons.The Act says that income tax returns are to be filed within time.It further states that advance tax is to be paid directly and in time.If an assessee fails to do so , he shall be charged under section 234A,234Band 234c.
PROVISIONS CONTAINED INSECTION 234A OF THE ACT:
Section 234A of the Act deals with default in furnishing the return of income. The Section provides that if an assessee fails to file his return in time , he shall be liable to pay interest @1% per month which is calculated from the due date till date of furnishing the return.
PROVISIONS CONTAINED IN SECTION 234B OF THE ACT:
Section 234B of the Act deals with default in payment of advance tax. It provides that if an assessee has to pay advvance tax .It provides that of an assesec has to pay advance tax and he has not paid such tax or if the advance tax paid by him is less than 90% of the tax which should be paid by him, he shall be liable to pay int@ 1 % every month or pash of a month.
PROVISIONS CONTAINED IN SECTION 234C OF THE ACT:
Provisions relating to department of advance tax. This sub section comes into play when advance tax paid is undersestimated or is not at all paid. It provides that interest is calculated on the difference between the instalment paid and that which is payable.