Urgent: interest calculation under 234b for paying less in ITRU

[Azharuddin]

I filed ITRU last year in may 2024 but my ca miscalculated the interest and paid around 70k less..this month it is processed and I have received a whooping demand of 1.3L wherein I see interest was calculated till nov 2025 ..as per the ITRU official document, it clearly says "Where the taxes are paid in parts before the filing of the updated return, the interest shall
be computed for the broken period considering the taxes paid in each part"

So as per my understanding, demand should be 70k *1.18= ~83k
18 months(may 2024-nov 2025)

Please guide and suggest what to do next..i am really tensed and depressed

 

[Odyssey]

@Dashanan new client

 

[msd07]

(A) 234B / 234C Interest on unpaid taxes​

This is where your understanding is correct — if your CA paid ₹70,000 less tax, interest @1% per month (simple interest) applies until payment.
Your calculation:

• May 2024 → Nov 2025 = 18 months
• Interest ≈ 70,000 × 1% × 18 = ₹12,600
• Total expected ≈ ₹82,600

This part is fine.

---

(B) BUT the ITR-U ALSO applies an “updated return premium”​

This is the part many CAs forget:

✔ ITR-U additional tax: 25% or 50%​

• If filed within 12–24 months from end of FY → 50% additional tax
• FY 2022–23 ends on 31-Mar-2023
• You filed ITR-U in May 2024 → This is after 12 months, so 50% applies.

So:

Updated Tax = 70,000​

ITR-U Premium = 50% of 70,000 = 35,000​

Now your total becomes:

Component	Amount
Unpaid tax	70,000
ITR-U premium (50%)	35,000
234B/234C interest	~12,600
Interest on premium	~2,000–4,000

This already reaches around ₹1.20–1.25 lakh, even before adding broken-period interest.
So a total demand around ₹1.3 lakh is mathematically correct under ITR-U rules.


As per ChatGPT and similar answer from Gemini aswell

 

[Azharuddin]

(A) 234B / 234C Interest on unpaid taxes​

This is where your understanding is correct — if your CA paid ₹70,000 less tax, interest @1% per month (simple interest) applies until payment.
Your calculation:

• May 2024 → Nov 2025 = 18 months
• Interest ≈ 70,000 × 1% × 18 = ₹12,600
• Total expected ≈ ₹82,600

This part is fine.

---

(B) BUT the ITR-U ALSO applies an “updated return premium”​

This is the part many CAs forget:

✔ ITR-U additional tax: 25% or 50%​

• If filed within 12–24 months from end of FY → 50% additional tax
• FY 2022–23 ends on 31-Mar-2023
• You filed ITR-U in May 2024 → This is after 12 months, so 50% applies.

So:

Updated Tax = 70,000​

ITR-U Premium = 50% of 70,000 = 35,000​

Now your total becomes:

Component	Amount
Unpaid tax	70,000
ITR-U premium (50%)	35,000
234B/234C interest	~12,600
Interest on premium	~2,000–4,000

This already reaches around ₹1.20–1.25 lakh, even before adding broken-period interest.
So a total demand around ₹1.3 lakh is mathematically correct under ITR-U rules.


As per ChatGPT and similar answer from Gemini aswell

But bro, when ITR U was calculated in may 2024 it included the 50% penalty so why again 50% more?my tax liability in my 2024 was 3.9L including interest + 50% penalty but instead of 3.9 I paid 3.2L, so that 70k which I didn't pay already include the 50% penalty..also the calculation in the demand notice was not done how you mentioned , I see interest under 234b was calculated till nov 2025( cross verified with department IT calculator)...but that section clearly says it should be calculated in broken period

 

[msd07]

But bro, when ITR U was calculated in may 2024 it included the 50% penalty so why again 50% more?my tax liability in my 2024 was 3.9L including interest + 50% penalty but instead of 3.9 I paid 3.2L, so that 70k which I didn't pay already include the 50% penalty..also the calculation in the demand notice was not done how you mentioned , I see interest under 234b was calculated till nov 2025( cross verified with department IT calculator)...but that section clearly says it should be calculated in broken period

it says the inrerest is calculated from the start of year and not when interest is.calculate... i guess u can do similar conversation in chatgpt.. it clearlt has answers.. u have to give all dates anf numbers correcrly

 

[Azharuddin]

it says the inrerest is calculated from the start of year and not when interest is.calculate... i guess u can do similar conversation in chatgpt.. it clearlt has answers.. u have to give all dates anf numbers correcrly

Yeah thats what I am saying in broken period..first calculation April 2022-may 2024 and 2nd from may 2024-nov 2025, this 2nd period is for the additional tax missed in the first period payment...

Check this case also

https://www.casemine.com/judgement/in/68ac705461d1743724a649ac

Here CIT clearly said it should be considered in broken period..broken period will come into picture of something was not paid before filing ITRU