Calculation of interest on advance tax - 234c

[Bhav]

Hi Everyone!

Can anyone help me with one doubt I have in 234c? All quarters and details mentioned below is for AY 2024-25 or FY 2023-24.
So I changed my company in Feb 2024. The previous company filed my returns for Q4 as a norm. In Form 16, I can see that the payment is done for Q4 but in AIS it is showing that payment is made for Q1 in April 2024. I am getting an interest for advance tax payment under section 234c. Is it because of this reason of employer making a payment to Q1 as shown in AIS? Can we consider AIS as final file?

 

[TaxWiser]

Hi Everyone!

Can anyone help me with one doubt I have in 234c? All quarters and details mentioned below is for AY 2024-25 or FY 2023-24.
So I changed my company in Feb 2024. The previous company filed my returns for Q4 as a norm. In Form 16, I can see that the payment is done for Q4 but in AIS it is showing that payment is made for Q1 in April 2024. I am getting an interest for advance tax payment under section 234c. Is it because of this reason of employer making a payment to Q1 as shown in AIS? Can we consider AIS as final file?

Hey! Let's sort this out together.

Understanding Section 234C:
Section 234C deals with interest for deferment of advance tax payments. If advance tax is not paid on time, interest is charged at 1% per month or part of the month for the period of delay¹.

Your Situation:

• Company Change: You changed your company in Feb 2024.
• Form 16: Shows payment for Q4.
• AIS: Shows payment for Q1 in April 2024.
• Interest Under Section 234C: Likely due to the mismatch in payment periods.

Possible Reason:
The interest might be because the payment made by your previous employer is recorded in Q1 (April 2024) instead of Q4 (FY 2023-24). This could be causing the system to treat it as a delay in advance tax payment for Q4, leading to interest under Section 234C².

AIS as Final File:
AIS (Annual Information Statement) is a comprehensive statement that includes all your financial transactions. It is generally considered accurate, but discrepancies can occur. It's essential to verify and reconcile the information in AIS with your records.

What You Can Do:

1. Verify Details: Double-check the dates and amounts in your Form 16 and AIS.
2. Contact Employer: Reach out to your previous employer to confirm the payment dates and ensure they are correctly reported.
3. File a Rectification: If there's an error, you can file a rectification request with the Income Tax Department to correct the details.

Hope this helps!

● Source of Information:
¹: [ClearTax] Article: interest imposed by income tax department under section-234c
²: [Tax2win] Article: section-234c
● Tool used: Samsung Notes

 

[Bhav]

Hey! Let's sort this out together.

Understanding Section 234C:
Section 234C deals with interest for deferment of advance tax payments. If advance tax is not paid on time, interest is charged at 1% per month or part of the month for the period of delay¹.

Your Situation:

• Company Change: You changed your company in Feb 2024.
• Form 16: Shows payment for Q4.
• AIS: Shows payment for Q1 in April 2024.
• Interest Under Section 234C: Likely due to the mismatch in payment periods.

Possible Reason:
The interest might be because the payment made by your previous employer is recorded in Q1 (April 2024) instead of Q4 (FY 2023-24). This could be causing the system to treat it as a delay in advance tax payment for Q4, leading to interest under Section 234C².

AIS as Final File:
AIS (Annual Information Statement) is a comprehensive statement that includes all your financial transactions. It is generally considered accurate, but discrepancies can occur. It's essential to verify and reconcile the information in AIS with your records.

What You Can Do:

1. Verify Details: Double-check the dates and amounts in your Form 16 and AIS.
2. Contact Employer: Reach out to your previous employer to confirm the payment dates and ensure they are correctly reported.
3. File a Rectification: If there's an error, you can file a rectification request with the Income Tax Department to correct the details.

Hope this helps!

● Source of Information:
¹: [ClearTax] Article: interest imposed by income tax department under section-234c
²: [Tax2win] Article: section-234c
● Tool used: Samsung Notes

Spoke to Employer and there are bit understanding they have paid to Q1. Thanks a ton for response. I will look into it.