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      Question

      Interest payable u/s 234C is computed at

      A Compound interest @ 1% p.m. Correct Answer Incorrect Answer
      B Simple interest @1% p.a. Correct Answer Incorrect Answer
      C Compound interest @ 1 % p.a. Correct Answer Incorrect Answer
      D Simple interest @1% p.m. Correct Answer Incorrect Answer

      Solution

      Section 234C of the Income Tax Act, 1961 provides for interest payable on delayed payment of advance tax. The interest is computed at a simple interest rate of 1% per month or part of a month on the amount of advance tax that is not paid on or before the due date. Therefore, the interest payable under Section 234C is simple interest at 1% per month.

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