Interest Relief on payment of tax for Due Date extension.

Due to the current pandemic situation, the Government has given an extension for filing the various income tax returns. At the time when the country is facing a second Covid wave, there is a lot of commotion in the day-to-day financial activities due to prevailing lockdown in the country. Thus as a relief to the taxpayers, ITR filing dates have been extended from July 31st to September 30th, 2021 for the A.Y. 2021-22.

           “The Government has vide Circular No. 9 of 2021 F. NO.225/49/2021-ITA-II dated 20th May 2021 provides relaxation with regards to filing of Income Tax Returns for the F.Y. 2020-21.

           The due date of furnishing the Income Tax returns of Companies, persons who are subject to any audit or partners of a partnership firm are liable to furnish the return of income by November 30th, 2021 instead of October 31st, 2021.

The Impact of ITR filing date extension on payment of Taxes:

If the return is not furnished within the due date u/s 139(1) of the Income Tax Act, 1961, there is a levy of interest u/s 234A. Section 234A levies an interest @1%per month from the month or part thereof from the original due date of filing of Income Tax return. Accordingly, no relief concerning Section 234A would be provided where the self-assessment tax liability exceeds Rs 1 lakh. Thus, it becomes important for taxpayers whose self-assessment tax liability exceeds Rs 1 lakh to pay the tax dues to file their returns before the original due date to avoid levying of interest u/s 234A.

So, even if you can’t file your return of income early due to lack of required documents, don’t delay payment of tax, if there is some tax due for AY 2021-22, there will be no relief on interest on tax payable.

Settlemytax is an online platform that assists taxpayers with their income tax return filing. Our team of qualified individuals is well versed with all the latest changes in the Income Tax Act as well we The Finance Act, 2021. So they will be able to guide you file your annual compliance diligently.