Section 423 — Interest for defaults in furnishing return of income
Old Act equivalent: Section 234A of IT Act 1961 Sub-part: E—Interest chargeable in certain cases
Statutory Text
- (1) Where the return of income for any tax year is furnished after the due date or is not furnished, the assessee shall be liable to pay simple interest as per the following formula:— I= 1% × A × T where,—
I = the interest payable;
A = the amount of tax on which interest is payable, as specified in sub-section (2);
T = number of months comprised in the period commencing on the date immediately following the starting date and ending on the end date, both specified in sub-section (2). (2) For sub-section (1), in respect of the circumstances specified in column B of the Table below, the starting date shall be the date specified in column C, the ending date shall be the date as specified in column D and the amount of tax on which interest is payable is specified in column E: TABLE Sl. No. Circumstances Starting date Ending date The amount of tax on which interest is payable A B C D E 1. Where the return is furnished under sec tion 263(1), (4) or (6) or in response to a notice under section 268(1) after the due date. Due date for furnishing the return of income under section 263(1). Date of fur nishing of the return. (a) Where a regu lar assessment is not made, tax on the total income as de termined under section 270(1)as reduced by tax paid; (b) Where a regular assessment is made, tax on the total income de termined under regular assess ment as reduced by tax paid. Sl. No. Circumstances Starting date Ending date The amount of tax on which interest is payable A B C D E 2. Where no return has been furnished un der section 263(1), (4) or (6) or in response to a notice under section 268(1). Due date for furnishing the return of income under section 263(1). Date of com pletion of the assessment under section
Provisos
None.
Explanations
None.
Tables
See statutory text above.
Key Structure
- Applies to: Any person required to furnish return of income who files late or not at all.
- Conditions: Simple interest at 1% per month or part of month from due date to actual filing or completion of assessment.
- Time limits: From due date under section 263(1) to date of filing/assessment.
- Monetary limits: 1% per month on tax due (after TDS, TCS, advance tax, relief credits).
- Exceptions: Interest reduced if return filed after due date but before assessment.
Cross-References
- Section 263
- Section 268
- Section 270
Amendment Notes
None noted from the extracted pages.