The CBDT has issued Circular No. 2/2015 dated 10.02.2015 on the issue of chargeability of interest u/s 234A of the Income-tax Act, 1961 on self-assessment tax paid before the due date of filing the return of income. 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.
Good clarification and directory circular to the officials in relation to charging interest u/s 234A of the Act while processing the return and help the assessee’s who paid heavily taxes in circumstantial position.