ITR: File tax returns within original deadline to avoid interest penalty
"There is a misconception that if the deadline has been extended, there is nothing to worry about," said Anurag Jain, Partner, ByTheBook Consulting.
The deadline to file income tax return (ITR) is September 30 this year. It was extended from July 31, which is the norm each year. While the deadline extension does provide relief to the taxpayers, what is little known is it doesn’t protect you from penalty. You still have to pay a penalty from August 1 onwards if your tax liability crosses a limit be it under self-assessment or advance tax. According to the Section 234A of the Income Tax Act, the interest will be levied on any unpaid amount of tax liability if the return is not furnished within the due date. The rule applies when the tax liability crosses Rs 1 lakh.
“There is a misconception that if the deadline has been extended, there is nothing to worry about. But if your tax liability crosses Rs 1 lakh, you will be charged an interest penalty of 1% per month. The clock starts ticking from August 1 onwards irrespective of the deadline extensions,” said Anurag Jain, Partner, ByTheBook Consulting LLP.
Mohnish Wadhwa, Partner, Wadhwa & Shah, said 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 (31 st July 2021) to avoid levying of interest u/s 234A.
He listed the following deadline extensions for AY 2021-22 that you should take a note of:
a) The due date of furnishing ITR in case of a taxpayer who is not liable for tax audit has been extended to September 30, 2021 from the original July 31, 2021
b) The due date of furnishing Audit Report in case of a taxpayer who is liable for tax audit has been extended to 31 st October 2021.
c) The due date of furnishing ITR in case of a taxpayer who is liable for tax audit has been extended to 30 th November 2021.
d) The due date of furnishing of belated/revised Return of Income which is originally 31 st December 2021 has been extended to 31 st January 2022.
e) TDS for the last quarter of the Financial Year 2020-21 has been extended to 15 th July 2021;
f) The Certificate of Tax Deducted at Source in Form No.16, required to be furnished to the employee may be furnished on or before July 31, 2021
Glitches in the new portal
Just over a month remains before the September 30 deadline gets over. However, the glitches in the new income tax portal continue. Finance Minister Nirmala Sitharaman has given a deadline of September 15 to Infosys, which is the software developer of the new portal, to fix all issues.
“The portal was launched with much fanfare, but it has not lived up to the expectations, unfortunately. It is expected that the timelines will be extended. However, don’t wait for the 11th hour. Prepare your documents such as investment proofs and Form-16 and file your ITR at the earliest,” said Jain.