Calculation of Interest

Amount of tax payable on the total income                                ……………………….

Less : Advance Tax Paid

Less : Tax Deducted at source

Less : Relief U/s 90/90A/91

Less : MAT credit allowed to be set off u/s 115JAA/115JD

Interest is charged on the left over Amount . We saw that Self – Assessment is not reduced to calculate left over Amount on which is charged , Therefore Interest gets charged on the amount of self-assessment tax paid by the assessee even before the due date of filing of return.

The CBDT has pointed out that in CIT vs. Prannoy Roy 309 ITR 231 (SC), the Supreme Court has held that interest u/s 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 the return for the relevant assessment year.

The CBDT has accordingly reviewed the present practice of charging interest u/s 234A of the Act on self-assessment tax paid before the due date of filing the return of income.

The CBDT has decided that no interest u/s 234A of the Act is chargeable on the amount of self-assessment tax paid by the assessee before the due date of filing the return of income.

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