Each and every product we use or service we consume comes with an expiry date or due date. Income Tax returns are not an exception to this. On one side Income tax is always an important aspect in the growth model of an economy, but on the negative side, tax liability is felt as a burden on tax payer. How worse it would be to a tax payer if an extra burden is added to the tax liability? Sounds unjustified! But itu2019s true; if you havenu2019t submitted the income tax returns within due date or paid tax within the prescribed time-limit; extra burden comes in your way along with tax liability. It all happens in the form of u2018INTERESTu2024 which is collected as a penalty and it accumulates till the default continues. Donu2019t be too worried and be thankful to the Income tax department, because the interest here is a simple interest and not compound interest or other kind.Under Income tax Act 1961, interests are levied on different kinds of defaults. Most important and frequent among them is Section 234A, 234B and 234C which deals with delay in filing income tax returns and delay in payment of advance tax. The individual provisions of these sections are discussed below:***SECTION 234 A u2024 Default in filing return***It is mandatory to file your income tax returns within the due date. Due date for individuals is 31 July of every year. However, one must note that the due date is extended till August 31 for the Assessment Year 2015-16. Consequence of not submitting your IT returns within due date is Penalty.Here, Penalty for the delay is in the form of interest @ 1% per month on the total tax liability. Important note is that any fraction of a month is treated as a full month. Interest under section 234A is levied from the period commencing on the date immediately following the due date of filing the return of income and ending on the date of furnishing the return of income, or in case where no return has been furnished, on the date of completion of the assessment under section 144.Interest under section 234A is levied on the amount of tax as determined under section 143(1) and where regular assessment is made, the tax on total income as determined under such regular assessment as reduced by advance tax, tax deducted/collected at source, relief claimed under various sections like sections 90/90A/91 and tax credit claimed under section 115JAA/115JD. Also note that interest under Section 234A is not payable if you donu2019t have any remaining liability to pay. Interest would not be payable in a case where tax has been deposited within due date of filing of income tax return and return is filed after due date.***SECTION 234 B u2024 Default in paying advance tax***Interest under section 234B is levied when the taxpayer has defaulted in advance tax payment; or where the advance tax paid by the taxpayer is less than 90% of the assessed tax. So, what is advance tax?Advance tax is the tax paid in installments by the tax payer where the total tax liability exceeds Rs. 10,000/- in any financial year. The interest is chargeable at a rate of 1% per month till the remaining tax liability is paid. If the Income tax department extends the due date for filing returns, you get benefit under section 234A but you cannot get benefit under section 234B and 234C, since these sections deals with Advance tax. Interest under section 234B is levied on the amount of unpaid advance tax. If there is a shortfall in payment of advance tax, then interest is levied on the amount by which advance tax is short paid. Interest under section 234B is levied from the first day of the assessment year, i.e., from 1st April till the date of determination of income under section 143(1) or when a regular assessment is made, then till the date of such a regular assessment.***SECTION 234C u2024 Default in payment of advance tax on due date***Non-payment or short payment of advance tax is covered u/s 234B, whereas 234C covers situations of installments not paid within the due date. 234C levies interest @ 1% per month for delay in payment of installments of advance tax.Advance tax is paid on the following dates of a financial year:ttttOn or BeforetIn case of a Corporate TaxpayertIn case of a Non-Corporate Taxpayer15th Junetu00a0u00a0u00a0u00a0u00a0u00a0u00a0 Up to 15% of advance tax payabletu00a0u00a0u00a0u00a0u00a0u00a0u00a0u00a0u00a0u00a0u00a0 NIL15th SeptembertUp to 45% of advance tax payabletUp to 30% of advance tax payable15th DecembertUp to 75% of advance tax payabletUp to 60% of advance tax payable15th Marchtu00a0u00a0u00a0u00a0 Up to 100% of advance tax payableu00a0u00a0u00a0u00a0 tUp to 100% of advance tax payablettFor corporate assessee, interest under section 234C is levied @ 1% for a period of 3 months on the differential amount (Advance tax to be paid less actual advance tax paid) for the first three installments and 1% for 1 month, in case of shortfall in payment of last installment.In case of non-corporate assessee, interest under section 234C is levied @ 1% for a period of 3 months on the differential amount (Advance tax to be paid less actual advance tax paid) for first two installments and 1% for 1 month in case of shortfall in payment of last installment.*No interest will be levied in case of any shortfall in payment of advance tax due on the returned income if:*1. There is undereor failure to ethe capital gain amount or income such as winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever.2. The assessee has paid the whole tax payable amount in respect of such income on the due date of payment of advance tax or if no installment is due then such tax is paid before the end of the financial year.Apart from the above sections, there are other sections as well such as 234D (http://www.incometaxindia.gov.in...) which deals with excess refund. Here the assessee shall be liable to pay simple interest at the rate of .5% (http://www.incometaxindia.gov.in...) on the whole or the excess amount so refunded, for every month or part of a month comprised in the period from the date of grant of refund to the date of such regular assessment. Section 220(2) deals with delay in payment of amount specified in notice of demand. Here, a simple interest of 1% per month is calculated on the amount specified in the notice of demand and the due date is the date mentioned in the notice. Be Aware of the Due Dates and file your returns and pay taxes in time which reduces the unwanted liability. You can claim many benefits if you have filed your IT return on time (Sweet 16 Benefits of filing Income Tax Return this season!). So go ahead and file your income tax returns with File Income Tax Return Online, IT Return Service,Income Tax Efiling, India| FinMart Your 360u00b0 Online Financial Supermarket, FinMart Online Financial Services, One Stop Solution for All Financial Needs (File Income Tax Return Online, IT Return Service,Income Tax Efiling, India| FinMart.com)u00a0 (File Income Tax Return Online, IT Return Service,Income Tax Efiling, India| FinMart.com)