Interest payable u/s 234C is computed at?

Solution

Interest payable under Section 234C of the Income Tax Act, 1961 is computed at simple interest at 1% per month or part of a month on the amount of advance tax that is not paid or paid in short. So, the interest is calculated on a monthly basis and not on an annual basis. This means that if a taxpayer fails to pay the advance tax on time, they will be liable to pay interest at 1% per month on the amount that is outstanding.