ITR filing due date extended but no relief in payment of income tax

The income tax department had extended the timeline of filing the income tax return of FY 2020-21 to 30th September 2021 from 31st July 2021 as a relief measure to the taxpayers during the COVID-19 pandemic. The individual taxpayers who are not required to get their books of accounts audited can file their income tax returns up to 30th September 2021. However, there is no extension of the due date of payment of income tax liability.

The income tax law will levy a penalty if you do not pay income tax within the prescribed due dates. As per the Income Tax Act, the taxpayer is liable to pay income tax in advance (advance tax) if his tax liability exceeds Rs 10,000, after reducing TDS, for the financial year. The taxpayers should pay the advance tax during the previous year (the year before the assessment year) in three different instalments.  

Furthermore, if there is any outstanding tax on computing the tax liability, after payment of advance tax, TDS, etc., the taxpayer shall pay such tax in the form of self-assessment tax up to the due date of filing the income tax return.

The government has extended the last date of filing the income tax return. However, it has not extended the due date of payment of self-assessment tax if the liability is more than Rs 1 lakh. So if your self-assessment tax liability is more than Rs 1 lakh and you pay tax after 31st July 2021, you are liable to pay interest at one per cent per month, or part of the month, from 1st August 2021 till the month of payment of tax. 

Senior citizens above 60 years (having income other than business or profession) are not liable to pay advance tax. However, there is no relief for the senior citizens for payment if the self-assessment tax liability is more than Rs 1 lakh for the FY 2020-21. They have to pay interest at one per cent per month, or part of the month, from 1st August 2021 till the month of payment of tax. 

Hence, you can file your income tax returns for FY 2020-21 by 30th September 2021. However, one can avoid a penalty on late payment of tax. You need to compute the income tax liability before 31st July 2021 to know if any self-assessment tax is payable. If it is above Rs 1 lakh, pay the tax liability before 31st July 2021 (original due date) to avoid the burden of penalty. 

For any clarifications/feedback on the topic, please contact the writer at namita.shah@cleartax.in

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