Income Tax due for FY19? Pay interest at just 0.75% per month before this date

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Updated: Mar 31, 2020 1:14 PM

The taxpayer will have to pay a late filing fee even if there is no tax due to be paid in the income tax return.

 late tax payment interest rate, financial year 2018-19 , last date itr filing, , late filing fee, extension, tds, covid 19, itr filingLast Date ITR Filing: If there is tax due, then one will be liable to pay interest, if applicable, on the due amount.

ITR Filing Last Date: Amidst the Coranavirus crisis, in order to provide some relief to the taxpayers and income tax filers, the government had come out with certain measures aimed at them. The last date for filing the income tax return (ITR) for the financial year 2018-19 has been extended to June 30, 2020, from the existing date of March 31, 2020. According to Homi Mistry, Partner, Deloitte India, “The Finance Minister, Nirmala Sitharaman held a press conference 24 March 2020 to announce various relief measures taken by the government on statutory and regulatory compliance matters in view of the outbreak of COVID19, however, the necessary legal and legislative amendment for giving effect to the aforesaid relief is awaited.”

The most important announcement was for the benefit of the late filers of ITR. The last date to file ITR for FY 2019 was August 31, 2019 failing which one could have filed by March 31, 2020, but with a late filing fee. Now, they can file till June 30, 2020. However, the late filing fee is what they need to pay. “The individual taxpayer will have to pay a late filing fee (under section 234F of the Income Tax Act, 1961 Act of Rs.1,000 if his total taxable income does not exceed Rs.5 lakh. If his total taxable income exceeds Rs.5 lakh, then he will have to pay a late filing fee of Rs.10,000. This is a mandatory fee and it will have to be paid even if there is no tax due to be paid in the tax return,” informs Mistry.

Also, there could be tax due amount that one may also have to pay while filing the ITR after the due date. “In addition to the above mentioned late filing fees, if there is tax due, then he will be liable to pay interest, if applicable, on the tax due. Interest will have to be paid for late filing for September 1, 2019, till the date when return is filed, for the shortfall in payment of advance tax for the period 1 April 2018 to the date of payment of the tax and for deferment in payment of advance tax. The interest is ordinarily payable at the rate of 1 per cent per month (including a part of the month). However, as per the relief provided by the Finance Minister, if the tax payment is made between 20th March 2020 to 30th June 2020, a reduced interest rate at 0.75 per cent per month will apply instead of 1 per cent per month for this period,” says Mistry.

It is important for all those employees who have changed jobs in FY 2018-19 to calculate their tax liability. It might happen that both old and new employer may give you the benefit of tax savings thus resulting in lower TDS. However, later on, the employee may be asked to pay balance tax along with interest.

For a new employee submitting the filled up Form 12B to the employer is, therefore, important. “it is important for an employee to submit Form 12B to his new employer at the time of changing his job. Form 12B is submitted to declare the income, exemptions, deductions already considered by the previous employer as well as the taxes already deposited. This will help the new employer to compute the tax to be deducted at the correct rate. If Form 12B is not submitted to the new employer, then it is likely that the new employer will provide the basic exemption benefit again while calculating the tax on salary. This will result in a double benefit leading to a shortfall in the TDS at the time of filing of the employee’s tax return and the employee will have to deposit the balance tax at that time, along with the interest,” says Mistry.

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