Circular 2/2015
F. No. 385/ 03 /2015-IT(B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes (CBDT)
North Block, New Delhi
10th February, 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.
SD/-
(Sandeep nigh)
Under Secretary to Government of India
1. The Chairperson, Members and all other officers of the
CBDT of the rank of Under Secretary and above
2. All Pr.
CCsIT/CCsIT/Pr.DsGIT/DsGIT
3. The Director (PR, PP & OL), MayurBhawan, New Delhi
for printing in the quarterly tax bulletin and for circulation as per usual
mailing list (100 copies)
4. The Comptroller and Auditor General of India (40 copies)
5. The DGIT
(Systems), New Delhi for necessary changes in Systems software
6. All Directors of
Income Tax, New Delhi
7. All Commissioners
of Income-tax (TDS)
8. The Director General of Income-tax, NADT, Nagpur
9. Guard File
