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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
      E Simple interest @ 2% p.m. Correct Answer Incorrect Answer

      Solution

      Section 234C of the Income Tax Act deals with the computation of interest for the deferment of advance tax payments. It requires taxpayers to pay their advance tax in installments, and if the taxpayer fails to do so, they may be liable to pay interest under this section. The interest is calculated using the simple interest method at the rate of 1% per month.

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