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Why you shouldn’t wait for the extended due date to file ITR
Due to concerns about technological issues in the new Income Tax Portal, the deadline for reporting ITR has been extended to provide relief to taxpayers in the wake of the Covid-19 outbreak.
Due to technological issues in the new Income Tax Portal, the due date for filing Income Tax Return (ITR) has been prolonged in this Assessment Year (AY 2021-22), first to September 30, 2021, and subsequently to December 31, 2021, as it was in the Covid-hit previous Assessment Year (AY 2020-21).
“The Central Government has extended the deadline for filing income tax returns for the financial year 2020-21 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 other things,” said Kapil Rana, Founder & Chairman, HostBooks Ltd.
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For late filing and payment of taxes, the taxpayer must pay interest. Interest is charged under section 234A if an ITR is not filed on time.
“If the taxpayer has not paid advance tax or has paid less than 90% of the tax burden, he or she will be required to pay interest at the rate of 1% every month or part of the month from April until the date of payment of tax,” he added.
Interest on Taxes Due
“Under section 208, a person is liable to pay advance tax if his tax liability for the year is Rs 10,000 or more,” Rana added, referring to the interest on tax payable. Even if you are late in filing your ITR, it is preferable to pay the advance tax as soon as possible.
In terms of advance tax payment, an individual who is a resident of India and has income other than income from business and profession is not obligated to pay tax in advance, and hence interest under section 234B does not apply to such a person.”
“In cases where the amount of tax on total income after deduction of advance tax, TDS/TCS, any tax relief allowed u/s 89, 90, 90A & 91, and alternate minimum tax credit exceeds Rs 1 lakh, interest under section 234A will be applicable because there are no issues with tax payment and the website is working seamlessly,” he added.
Fee for being late
In addition to the interest on the tax owed, failure to pay by the due date incurs a late fee under section 234F of the Income Tax Act.
- “If the return is submitted beyond the due date, late fines of Rs 5,000 would be charged. The cost will be Rs 1,000 if the overall income does not exceed Rs 5 lakh,” Rana explained.
- However, if you miss a due date up until December 31 of an Assessment Year, you’ll be charged Rs 5,000, and if you miss it after that, you’ll be charged Rs 10,000.
- So, if a taxpayer misses the extended deadline of December 31, 2021, he or she will be fined twice as much, or Rs 10,000.