No interest on amount of self-assessment tax paid by assessee before due date of filing of return of income - CBDT
CBDT 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.
Interest under Section 234A of the Income-tax Act, 1961 is charged in case of default in furnishing return of income by an assessee. 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.
It has been held by the Hon'ble Supreme Court in the case of CIT vs Prannoy Roy - 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 and it has been 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.
CBDT Circular No. 2/2015, Dated: February 10, 2015