ITR due date extension: Will you get interest relief on payment of tax during the extended period?

The government has announced extension in the various tax related compliance dates, including the due date of filing Income Tax Return.

Due to the disruption in economic and financial activities after the lockdowns and other restrictions imposed to counter the second Covid wave, the government has announced extension in the various tax related compliance dates, including the due date of filing Income Tax Return (ITR).

Instead of July 31, 2021, the due date for filing ITR for the Assessment Year (AY) 2021-22 will now be September 30, 2021.

“The Government has vide Circular No. 9 of 2021 F. NO.225/49/2021-ITA-II dated 20th May 2021 provided relaxation with regards to due dates of filing of Income Tax returns considering the ongoing severe pandemic situation in the country. In accordance with the same, the due date for furnishing of Income Tax return for AY 2021-22 by persons (other than company) not subject to any audit has been extended from July 31, 2021 to September 30, 2021. Similarly, the due date for furnishing of Income Tax return for AY 2021-22 by companies, persons who are subject to any audit and partners of a partnership firm which is liable to audit has been extended from October 31, 2021 to November 30, 2021,” said Dr. Suresh Surana, founder, RSM India.

What will be the impact of the extension in the due date of filing ITR to September 30 on interest on tax payable?

“Section 234A of the Income Tax Act, 1961 (‘The IT Act’) provides for levy of interest on any unpaid amount of tax liability if the return is not furnished within the due date u/s 139(1) of the IT Act. It is pertinent to note that relaxation with respect to Interest u/s 234A which is charged @ 1 per cent per month for every month or part of a month thereof after the original due date of filing ITR of the IT Act would only be available in case the self assessment tax liability (after providing for TDS, advance tax, etc.) does not exceed Rs 1 lakh. Accordingly, no relief with respect to 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,” said Dr. Surana.

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

Will there be any relief for senior citizens and individuals below 60 years of age?

“In case of any resident senior citizen i.e. aged 60 years or above not deriving any Profits and Gains from Business and Profession, there is no mandatory requirement to pay any advance tax and they can pay the entire tax liability by way of self assessment tax. Thus, any tax paid by such senior resident person within the due date provided in the Act i.e. July 31, 2021 (without extension under this Circular), shall be deemed to be the advance tax and deducted while computing the limit of Self assessment tax of Rs 1 lakh. However, such relief does not apply for individuals below 60 years of age,” said Dr. Surana.

So, even for senior citizens, there is no relief in interest on tax payable during the period between the original due date i.e. July 31, 2021 and the extended due date i.e. September 30, 2021.