Income Tax Return: Why you shouldn’t wait for the extended due date to file ITR

The due date of filing ITR has been extended to provide relief to taxpayers, amid the Covid-19 pandemic, and due to concerns and technical glitches in the new Income Tax Portal.

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Despite the extension in due date, taxpayers have to pay interest for delay in payment of tax.

Like the Covid-hit last Assessment Year (AY 2020-21), in this Assessment Year (AY 2021-22) also the due date of filing Income Tax Return (ITR) has been extended – first up to September 30, 2021 – and then to December 31, 2021, due to technical glitches in the new Income Tax Portal.

“In order to provide relief to taxpayers, amid the Covid-19 pandemic, and due to concerns and technical glitches in the Income Tax website, regarding filing and verification of returns, among others, the Central Government has extended the deadline for filing income tax returns for the financial year 2020-21,” said Kapil Rana, Founder & Chairman, HostBooks Ltd.

“However, even though taxpayers got relief in filing ITR, but still taxpayer should file return as early as possible in order to avoid interest under section 234A and 234B as there is no relief on the penalty for late filing of returns under sections – 234A and 234B of the Income Tax Act 1961. The taxpayer has to pay interest for delay in return filing and payment of tax. Delay in filing ITR attracts interest under section 234A. If the taxpayer has not paid advance tax or has paid less than 90 per cent of the tax liability, he/she will have to pay interest under section 234B at the rate of 1 per cent per month or part of the month from April till the date of payment of tax,” he added.

Interest on Tax Payable

Talking on the interest on tax payable, Rana said, “Under section 208, a person is liable to pay advance tax if his tax liability for the year is Rs 10,000 or more. So, even if you are late in filing ITR, it is better that you pay the advance tax at the earliest. As far as the advance tax payment is concerned, an individual who is resident in India having age 60 years or more and having income other than income from business and profession is not required to pay tax in advance, hence interest under section 234B shall not affect such a person.”

“In cases where the amount of tax on the total income after deduction of the amount of advance tax, TDS/TCS, any relief of tax allowed u/s 89, 90, 90A & 91 and alternate minimum tax credit, exceeds Rs 1 lakh, interest under section 234A will be applicable because as far as tax payment is concerned, there are no issues faced by the taxpayer and the website is working seamlessly,” he added.

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Late Fee

Apart from the interest on tax payable, missing the due date attracts late fee as well u/s 234F of the Income tax Act.

“Late fees of Rs 5,000 shall be payable if return is submitted after the due date. In case the total income does not exceed Rs 5 lakh, then the fee shall be Rs 1,000,” said Rana.

However, the late fee of Rs 5,000 is applicable on missing a due date up to December 31 of an Assessment Year and in other cases, the fee becomes Rs 10,000.

So, on missing the extended due date of December 31, 2021 a taxpayer would end up paying double the fine or Rs 10,000.

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First published on: 27-09-2021 at 18:13 IST