Section 424 - Interest for defaults in payment of advance tax.

Advance tax default interest applies when tax is unpaid or short-paid, with later reassessment and adjustments affecting the interest payable.

Interest is chargeable for default in payment of advance tax where an assessee fails to pay advance tax or pays less than 90% of the assessed tax. The assessee is liable to simple interest at 1% for every month or part of a month from 1 April following the tax year until determination of total income or completion of regular assessment, as applicable, on the assessed tax or the shortfall amount. The provision also adjusts interest on later payment, reassessment, recomputation, or other specified orders, with refund of any excess interest paid.