Section 234C

Interest for deferment of advance tax.

234C. (1) Where in any financial year, the advance tax paid by the assessee on his current incomeon or before the 15 th day of September is less than twenty per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than fifty per cent, of the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one and one-half per cent per month of the shortfall from for a period of three months on the amount of the shortfall from twenty per cent or, as the case may be, fifty per cent of the tax due on the returned income.

Explanation : In this section, "tax due on the returned income" means the tax chargeable on the total income declared in the return of income furnished by the assessee for the assessment year commencing on the 1 st day of April immediately following the financial year in which the advance tax is paid, as reduced by the amount of tax deductible at source in accordance with the provisions of Chapter XVII-B on any income which is subject to such deduction and which is taken into account in computing such total income.

(2) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.

[AS AMENDED BY THE FINANCE ACT, 1988]