Due date for income tax return for AY 2020-21 (FY 2019-20) extended to 30th November 2020 by CBDT (Notification No 35/2020). Returns otherwise due 31st July or 31st October 2020 may now be filed by 30th November 2020.
However, tax filing comes with tax payments, and interest under section 234A/B/C is often overlooked in estimations but significantly amplifies final tax payable.
Section 234A – Interest for delay in return filing, levied if self-assessment tax is unpaid by the return filing due date.
Section 234B – Interest for non/short payment of advance tax, applicable if less than 90% of advance tax payable has been paid.
Section 234C – Interest for deferment of advance tax instalments, levied if 12%, 36%, 75% and 100% of assessed tax is not paid by 15th June, 15th September, 15th December and 15th March respectively.
Relief has been granted only under section 234A — no interest upto 30th November 2020 where self-assessment tax liability is upto Rs. 1 lakh. Where self-assessment tax liability exceeds Rs. 1 lakh, full tax remains due by 31st July/30th September, with interest applying to delayed payment. No relief is provided under 234B/234C (advance-tax-based).
Assessees with (1) self-assessment tax payable above Rs 1 lakh, or (2) insufficient/irregular advance tax payments, should not treat 30th November as the effective due date and should aim to complete tax payments by 31st July/30th September to avoid interest.
In the COVID-19 lockdown period, timely tax payment — despite the financial crunch — can help assessees avoid interest levy and gain some relief.