Penalties Section 140A(3) — Default in Payment of Self-Assessment Tax
Section 140A(3) — Default in Payment of Self-Assessment Tax
Income Tax Act 1961 — 140A(3)
Assessee treated as in default under s.220 for the unpaid portion of self-assessment tax; interest u/s 220(2) applies.
The Penalty
Interest u/s 220(2) — 1% per month simple
- Cap
- None stated
- Calculation base
- Self-assessment tax computed with the return but not paid
- Period
- From the day of default until actual payment.
When does this apply?
Return filed without paying the self-assessment tax shown as payable on it.
Calculate this amount
This estimate applies only the rate and caps published in the authored rule for this page.
₹4,40,000₹1,00,000 × 220% × 2 months
Worked examples
| Scenario | Calculation | Result |
|---|---|---|
| Return filed with SA tax ₹2,00,000 unpaid; paid 3 months later | ₹2,00,000 × 1% × 3 = ₹6,000 | ₹6,000 |
How it is levied
The unpaid SA tax becomes recoverable under s.220 machinery. s.220(2) interest is automatic; s.221 penalty is AO-discretionary with reasonable-cause defence.
⚠ VERIFY
Confirm interaction with s.234A interest for the same period — courts have held s.220(2) does not apply for the period covered by s.234A on the same amount.