Filed Updated ITR? CPC May Owe You ₹10,000 Back

If you filed an updated income tax return (ITR-U) and paid your full tax before submitting, the tax department's system may still be charging you extra interest under Section 234B — which is actually against the law. You can fight it.

Here's what happened: The Centralised Processing Centre (CPC) is computing Section 234B interest on updated returns even after the taxpayer has paid full taxes before filing.. Under income tax law, Section 234B interest must stop accruing once advance tax or self-assessment tax is fully paid — the CPC logic ignores this cutoff.. This error creates inflated tax demands, forcing honest taxpayers to pay more than legally required unless they actively raise a rectification request..

What you should do: Log in to incometax.gov.in and check your ITR-U intimation under 'e-Proceedings' — look for any Section 234B interest demand raised after your tax payment date.. File a rectification request under Section 154 online on the income tax portal, clearly stating the interest was charged beyond your actual tax payment date.. Keep your challan receipts (BSR code, date of payment, amount) handy as proof — upload them with your rectification request to strengthen your case..

If your rectification is rejected, escalate by filing a grievance on the CPGRAMS portal or directly contact your Assessing Officer — CPC errors are routinely corrected this way.