Taxpayers nonetheless have to pay curiosity regardless of extension of submitting dates



The federal government might have prolonged the due date for submitting Revenue Tax returns on account of the difficulties being reported by the taxpayers within the digital submitting of returns owing to the glitches within the Tax Portal, however taxpayers should be required to pay extra curiosity on the price of 1 per cent monthly regardless of submitting the return within the prolonged interval in case the steadiness tax payable exceeds Rs 1 lakh.


As per the clarification appended to the Round extending the dates for submitting tax returns, it has been clarified that the extension of the due date shall not be relevant in respect of provision of part 234A.





The implication of this will likely be that regardless of submitting the return within the prolonged interval, the taxpayers shall be required to pay extra curiosity on the price of 1 per cent monthly from the unique due date of submitting tax return i.e. July 31, 2021 within the case of unusual taxpayers and October 31 within the case of taxpayers who’re required to get their accounts audited, in case the steadiness quantity of tax payable i.e. self-assessment tax payable exceeds Rs 1 lakh.


Although the federal government has prolonged the due date of submitting return however has particularly offered that regardless of extension of due date, curiosity on the price of 1 per cent shall be required to be paid in case the steadiness tax payable exceeds Rs 1 lakh.


“Technically, the one aid by this Round is non-levy of price of Rs 5,000 for late submitting of return beneath part 234F of the Act. It might be related to level out that within the case of these taxpayers who’re liable to pay advance tax and the place such advance tax falls in need of the 90 per cent of assessed tax i.e. tax on whole earnings as diminished by TDS, such taxpayers are additionally required to pay regular curiosity on the price of 1 per cent monthly beneath part 234B of the Act from April 1,” eminent tax professional Ved Jain mentioned.


“Accordingly, the implication of this extension will imply {that a} taxpayer who’s liable to pay advance tax should pay curiosity on the price of two per cent monthly (1 per cent beneath part 234B and 1 per cent beneath part 234A) from the unique due date of submitting of return i.e. July 31 or October 31, because the case could also be,” he added.


Additional, even the taxpayers who usually are not required to pay advance tax however have a self-assessment tax legal responsibility exceeding Rs 1,00,000 can even be required to pay curiosity on the price of 1 per cent from the unique due date i.e. July 31 or October 31, because the case could also be, beneath part 234A of the Act.


It’s to be famous that curiosity beneath part 234A on the price of 1 per cent in case of late submitting of return is in reality a penalty. Earlier than the modification made by the Direct Tax Legal guidelines (Modification) Act, 1987, there was a penalty on the price of two% monthly for late submitting of return beneath part 271(1)(a) of the Act.


The above Modification Act in an effort to simplify the tax provision has substituted this penalty by curiosity beneath part 234A of the Act.


Accordingly, to levy such curiosity, which in reality is a penalty for late submitting of return, when the due date has been prolonged, not as a result of the taxpayer was not ready to file the return however due to the difficulties in digital submitting of the return on the Tax Portal, will not be justified, Jain mentioned.


It might be related to notice that in case self-assessment tax is paid on earlier than the unique due date, then there shall be no legal responsibility to pay curiosity beneath part 234A of the Act. From this, it follows that the intention of the CBDT is to increase solely the due date of submitting of return however to not lengthen the date of creating cost of self-assessment tax.


A number of taxpayers have confronted delays in well timed submitting of returns as a consequence of glitches within the new tax portal.


Within the above circumstances, when the delay in cost of tax can’t be attributed to the taxpayer, it might not be justified to levy this extra curiosity, which is extra within the nature of a penalty, on the price of 1 per cent monthly from the due date of submitting return, mentioned Jain.


–IANS


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(Solely the headline and film of this report might have been reworked by the Enterprise Customary employees; the remainder of the content material is auto-generated from a syndicated feed.)

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