Income-tax Act, 1961Section 234A
- Simple interest 1% per month or part of a month
- From the day after the due date to the date of filing
- Calculated on tax due after advance tax, TDS/TCS and reliefs
Applies to FY 2025-26 (AY 2026-27) and earlier years.
IT Act 1961 → 2025 / Section 234A
InterestSection 234A → Section 423
Interest for default in furnishing the return of income
Section 234A of the old Income-tax Act, 1961 · new section 423 under the Income-tax Act, 2025
New reference Section 423
Income-tax Act, 2025Section 423
- Same charge, now section 423
- 1% per month rate retained
- Part E of the interest chapter: sections 423 to 426
Applies from tax year 2026-27 (from 1 April 2026).
What changed
Renumbered and presented in a more structured format. The rate and basis of computation are unchanged.
Practice notes
- For a return of FY 2025-26 filed late in 2026, interest is still under section 234A, because both the obligation and the default arose under the 1961 Act.
- Late filing fee (old 234F) is section 428; interest on excess refund (old 234D) is section 426.
Frequently asked
What is section 234A called in the new Income-tax Act, 2025?
Section 234A of the Income-tax Act, 1961 corresponds to Section 423 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).
What changed in section 234A under the new Income Tax Act?
Renumbered and presented in a more structured format. The rate and basis of computation are unchanged.
Is section 234A still applicable for FY 2025-26?
Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 234A of the 1961 Act. Section 423 of the 2025 Act applies from tax year 2026-27.