Due date for income tax return for the AY 2020-21 (FY 2019-20) has been extended to 30th November, 2020 by the CBDT vide Notification No 35/2020. Hence, the returns of income which are required to be filed by 31st July, 2020 and 31st October, 2020 can be filed upto 30th November, 2020.
However, Tax filing comes with Tax payments and with that comes Interest levy under section 234A/B/C. This interest component and it’s impact gets ignored many times while doing tax estimations and calculations. However, later it has a great impact in amplifying the final tax payable amount.
So let’s first have a look at the sections 234A/B/C of the Income-tax Act, 1961:
234A : Interest for delay in Return Filing
This is levied if Self Assessment tax is not paid upto due date of return filing.
234B : Interest for non/short payment of advance tax
This is applicable if assessee has paid less than 90% of Advance tax payable
234C : Interest for deferment of Advance tax instalments
This shall be levied if Assessee does not pay upto 12%, 36%, 75% and 100% of assessed tax in the quarterly instalments of 15th June, 15th September, 15th December and 15th March.
Amongst the above interest sections, relief has been provided only under section 234A stating that the said interest will not be levied upto 30th November 2020 in the case of a taxpayer whose self-assessment tax liability is upto Rs. 1 lakh. However, it is clarified that there will be no extension of date for the payment of self-assessment tax for the taxpayers having self-assessment tax liability exceeding Rs. 1 lakh. In this case, the whole of the self-assessment tax shall be payable by the due dates specified in the Income-tax Act, 1961 i.e. 31st July and 30th September and delayed payment would attract interest under section 234A.
Whereas, in respect of 234B/C which are based on Advance tax payments, there is no relief being provided.
So, in the following two cases listed below, the assessee should not consider 30th November as the due date and should not procrastinate the data finalization, tax calculations and its payment:-
- Self-assessment tax payable is estimated to be above Rs 1 Lakh.
- Sufficient and regular advance tax payments have not been made.
These assessees should rather aim at the respective due dates under the Act i.e. 31st July and 30th September so as to get completed with Tax payments as far as possible so as to avoid interest levy.
In these turbulent times of COVID-19 and lockdown, businesses as well as individuals are facing high financial crunch and so tax payments itself is going to be an inevitable hit to their pocket. At least, timely payment of the same can avoid the interest levy and thus result in some relief to the assessees!