Section 234C of the Income Tax Act deals with interest on delayed payment of advance tax installments. Interest at 1% for every month or part of the month is levied for delay in payment of advance tax installments.What Is Section 234C of the Income Tax Act?Section 234C deals with delay in payment of installments of advance tax. Under this section 1% interest shall be levied for every month or part of the month for delay in payment of advance tax installments.Interest under Section 234C applies only up to March 31st, regardless of any unpaid advance tax lingering beyond that date.The advance tax installment shall be paid on 15th June, 15th September, 15th December, and 15th March of the financial year.Current laws require taxpayers to pay advance tax only when their income tax liability for the fiscal year exceeds Rs.10,000 after deducting TDS for the applicable fiscal year.Calculation Of Interest Under Section 234CThe interest on delayed payment of advance tax in case of a taxpayer other than the one opting for presumptive income u/s 44AD is as below:ParticularsRate of InterestPeriod of Interest Amount on which interest is calculatedIf the Advance Tax paid on or before June 15 is less than 15% of the Amount*Simple interest @1% per month3 months15% of [Amount* (-)tax already deposited before June 15]If Advance Tax paid on or before September 15 is less than 45% of the Amount*Simple interest @1% per month3 months45% of [Amount* (-) tax already deposited before September 15]If Advance Tax paid on or before December 15 is less than 75% of the Amount*Simple interest @1% per month3 months75% of [Amount* (-) tax already deposited before December 15]If Advance Tax paid on or before March 15 is less than 100% of the Amount*Simple interest @1% per month–100% of [Amount* (-) tax already deposited before March 15]*amount refers to assessed tax = Tax liability - TDS/TCS - Section 90 Relief Illustration To Calculate Interest For Late PaymentConsider that your total tax liability for this financial year is Rs.100,000, and it needs to be paid in instalments as explained above. Assume there is no TDS here. If you made partial payments instead, you will be liable to pay interest as per the last column in the table below:Payment DatesAdvance Tax payableTotal Advance Tax paidShortfall (Cumulative)Penalties (Cumulative)15th June15,0005,00010,000@1% * 3*10,000 = 30015th September45,00025,00020,000@1% * 3 *20,000=60015th December75,00035,00040,000@1% * 3 *40,000=120015th March1,00,00050,00050,0001% * 1 *50,000=500The total interest payable is Rs 2,600.Criteria Under Which Advance Tax Interest Is Not PayableNo interest is payable if there is any shortfall in payment of advance tax due if it is on account of underestimation or failure to estimate the amount of capital gains or speculative income (lottery income, gambling income, etc). The taxpayer has paid in full, the tax payable on the income mentioned above while paying the remaining instalments of advance tax due, or if no instalment is due, the taxpayer pays them before the end of the financial year. Exceptions To Paying Interest Under Section 234CIf you meet any of the following criteria, you are exempt from paying advance tax and, as a result, interest under Section 234C is not assessed.A resident senior citizen with no income under the 'PGBP' headingIf your net tax liability is less than Rs 10,000, no interest will be charged under Section 234C.What Is The Difference Between Section 234B & Section 234C?Section 234B imposes interest on taxpayers who fail to pay advance tax or pay less than 90% of the net tax payable during the assessment year. As a result, the need to pay interest under Section 234B arises after the end of the fiscal year until the date of tax payment.Section 234C imposes interest on taxpayers who fail to pay their taxes on time during the fiscal year.Example: For the FY 2023-24, if there is any deficit in payment of taxes, then Interest u/s 234C will be computed for delay till 31st Mar 2024, any delay in payment of taxes after 1st April 2024 till the date of such payment Section 234B interest will be computed while your file your ITR.Remember, ClearTax automatically calculates the interest under Section 234 for you based on the amounts you enter and the dates.For a better understanding, read more related articles:Interest Imposed by the IT Department on delay of advance tax payment – Section 234BInterest Imposed by the IT Department – Section 234A const userAgent = navigator.userAgent || navigator.vendor || window.opera; const inlineCTAbutton = document.getElementById('inlinebtnLink'); if (/android/i.test(userAgent)) { inlineCTAbutton.href = "https://black-cleartax.app.link/filing-entryscreen" } if (/iPad|iPhone|iPod/.test(userAgent) && !window.MSStream) { inlineCTAbutton.href = "https://cleartax.in/MyAccount/start" } .

Assets like stocks, bonds, property, mutual fund units, property etc., are great investment options that generate capital gains when sold/redeemed. Thus, they are called capital assets, and the profits generated from their sale are liable for taxation under the head capital gains.So, if you are thinking of investing in such assets, it is important to know about capital gains tax, its types, and available exemptions. Keep reading for a deeper insights around the following:Recent Budget Updates on Capital GainsWhat is capital gains taxCapital gains Tax Rules for different asset classesTax exemptions on capital gainsConclusion  What is Capital Gains Tax?As mentioned above, when you gain profits from the sale of capital assets, there are tax implications. This is called capital gains tax. Now, based on the holding period of the assets, there can be two types of applicable capital gains tax:Short-term capital gains tax orLong-term capital gains taxShort-Term Capital Gains TaxWhen you sell your capital assets after holding them for a period of less than or equal to 24 months, it would be considered a short-term asset.

Section 192 provides for salary TDS, wherein TDS is deducted under the applicable slab rates. While the TDS already deducted on your income is reflected on your Form 26AS and AIS, you can claim TDS refund if your tax liability is less than the total TDS deducted;.What is TDS on Salary?Section 192 of the Income Tax Act deals with TDS on salary income. It requires employers to estimate the total income of an employee for the financial year and deduct tax if the estimated salary exceeds the basic exemption limit. The TDS is computed according to the applicable income tax slab rates under the chosen tax regime, which means the deduction amount will vary from employee to employee depending on their income and eligible deductions. Who Can Deduct TDS Under Section 192?The employers are required to deduct TDS under section 192 every month and deposit it with the government within a specific time-period. The employers can be:Companies (Private or Public)IndividualsHUFTrustsPartnership firmsCo-operative societiesThe employer’s status such as HUF, firm or company is irrelevant for the deduction of tax at source under this section. Only employer-employee relationship matters. According to section 192 of the Income Tax Act, there must be an employer-employee relationship between the deductor and deductee for TDS. Moreover, the number of employees employed by the employer also does not matter for deducting TDS.  Section 192 TDS RatesAs mentioned already, section 192 TDS is deducted under applicable slab rates of the employee.Th employer should estimate the total income for the taxpayer, and deduct TDS if there is a possible tax liability on the estimated total income.The slab rates under the new regime and old regime are as follows:Income Tax Slabs for FY 2025-26 (AY 2026-27)Income Tax Rates for FY 2025-26 (AY 2026-27)Up to Rs.

TDS stands for Tax Deducted at Source. It is a system under the Income Tax Act where tax is deducted by the payer and remitted to government, for certain payments like salary, rent, interest, and professional fees. TDS ensures timely tax collection and helps the government track taxable income throughout the financial year.What is TDS?TDS stands for Tax Deducted at Source. It is a system under the Income Tax Act where tax is deducted by the person making specified payments such as salary, rent, interest, commission, or professional fees. The person deducting tax is known as the deductor, and the person receiving the payment is the deductee.The deducted amount is deposited with the Income Tax Department against the deductee’s PAN. While the deductee receives the net payment (after TDS), the gross income is used to calculate total tax liability. The TDS deducted is credited against the final tax payable. If the total TDS is more than the actual tax liability, the excess is refunded after filing the income tax return.Applicability of TDSAny person making specified payments mentioned under the Income Tax Act is required to deduct TDS at the time of making such payments. Different types of payments are governed by different TDS provisions, and there is threshold limit is fixed for different types of payments.

Income tax return filed is processed by the CPC - Central Processing Centre. Presently, CPC in Bangalore is responsible for carrying out all primary assessments. Processing of ITR begins shortly after you E-verify your return. Usually, the ITR filed is processed within 20-45 days of e-verification.Key Reasons for Delay in ITR Processing FY 2024-25Expanded database with the Income Tax Department to cross verify most of the deduction and refund claims made.Unusually high refund claims as compared to preceding financial years.Incorrect details in the return or differences between your ITR and the Income Tax Department’s data.Income Tax Return Filing and ITR VerificationTo avoid late fees and penalties, taxpayers must submit their income tax returns within the deadline. The returns will be processed once you file and verify your ITR, whether before or after the due date.

Gifts are treated as income under the Income Tax Act. If the value of the gift exceeds certain limits, it may be taxed as “Income from Other Sources”. However, there are certain exemptions available if gifts are received from certain persons or on certain occasions. Gifts received within a value of Rs. 50,000 is always exempt. In this article, we’ll help you understand how gift taxation works—what types of gifts are taxable, what the thresholds are, and what exemptions might apply.Gift Taxation in IndiaAs per Section 56 of the Income-tax Act,1961 gifts received by any person or persons are taxed in the hands of the recipient under the head ‘Income from other sources’ at normal tax rates.

Sustainable growth has gained vast attention among the public and has become a key focus in policy formation by governments in recent times. Green Growth was one of the top seven priorities of the Union Budget 2023. Dive into this blog to gain a better understanding What is Section 80EEB?Section 80EEB of the Income Tax Act allows you to claim tax savings of up to Rs.1.5 lakh on interest paid on a loan made specifically to purchase an electric car. However, certain restrictions and conditions concerning the loan issuer and the electric vehicle must be followed in order to claim the 80EEB deduction.You can claim tax deduction benefits only if the loan is approved between 1 January 2019 and 31 March 2023.Features of Section 80EEBEligibility CriteriaThe deduction under this section is available only to individuals opting to pay taxes under the old tax regime. It is not available to any other taxpayer.

Long Term Capital Gains (LTCG) arise from sale of capital assets like stocks, properties etc., held for a period of more than 24 months. The tax rate on Long Term Capital Gains is 12.5% for all capital assets. However, for listed equity shares, equity-oriented funds, and units of business trusts, the LTCG exceeding Rs. 1.25 lakh will be taxed flat at 12.5%.What is Long-term Capital Gain (LTCG)?Capital gains/profits arising from the transfer of Long-Term Capital Assets is referred to as Long-Term Capital Gains or LTCG. An asset held for more than 24 months is termed as a long term capital asset.For listed equity shares, equity oriented funds, and units of business trust, the holding period is 12 months. (if held for more than 12 months, they are considered long term capital assets)Classification of LTCG TaxThe Long-Term Capital Gains taxation is divided into two sections: Section 112 and Section 112A. Section 112A applies in the case of the following assets:Equity share in a listed companyUnit of equity-oriented fundUnit of business trustSection 112 applies to all other cases of Long-Term Capital Gains not covered under Section 112A.Long-term Capital Gain (LTCG) Tax Rate The following tax rates are applicable to long-term capital gains:Assets SoldLong Term Capital Gain (LTCG) Tax Rate Sold before 23rd July, 2024Sold on or After 23rd July, 2024Listed Equity SharesEquity-Oriented Mutual FundsUnits of Business Trust10% Without Indexation12.5% Without IndexationLand and Building20% With Indexation12.5% Without Indexation(Option to Individuals and HUF  - 20% with indexation or 12.5% without indexation) Other Capital Assets20% With Indexation12.5% Without IndexationCalculation of LTCG TaxTo calculate the long-term capital gains accurately, follow the steps mentioned below:Step 1: Determine the Full value of considerationThe total amount received from the transfer of capital assets.

For the FY 2025-26, taxpayers for an income up to Rs. 12 lakhs can be practically tax-free. The rebate limit has been increased to Rs. 60,000 for an income up to Rs 12 lakhs under the new regime.Tax Slabs Under The New Tax Regime For FY 2025-26The revised tax slabs under the new regime for FY 2025-26 (AY 2026-27) are as follows:Income Tax SlabsTax RateUp to Rs. 4 lakhsNILRs.

Section 139(4) of the income tax act deals with belated return, which can be filed if a taxpayer misses the due date for filing the original return under Section 139(1). Such a return can still be filed up to 31st December 2025, but it attracts a late fee under Section 234F and may also lead to loss of certain benefits, such as carrying forward losses.Key HighlightsPenalty: Late fee of Rs. 1,000 / 5,000 (u/s 234F) and interest (u/s 234A/B/C).Limitations: Business and capital losses cannot be carried forward; certain deductions are disallowed.Revision: A belated return can be revised only up to 31st December 2025.What is a Belated Return?If you have missed filing your return with the original return due date, you can still file belated return under section 139(4).The due date for filing original returns for FY 2024-25 is 16th September, 2025. Usually, the original return due date is 31st July of the next financial year.The due date for filing belated return 31st December of the relevant assessment year. For financial year 2024-25, the due date for filing belated return is 31st December, 2025.It is recommended to file belated return even if you have missed your original return due date, to avoid consequences of not filing ITR.Limitations of a Belated ReturnIf you miss the due date for ITR and file belated returns, you may face the following consequencesInterest: Interest may be applicable under sections 234A, 234B and 234C.Late fee: A late fee will be levied under Section 234F while filing a belated return: Gross Total IncomeLate Feeup to Rs.