Taxpayers could must pay pursuits on excellent earnings tax exceeding Rs 1 lakh

The Central Board of Direct Taxes has extended the due date for filing of the ITR for the Assessment Year 2020-21 to 31-12-2020 for non-audit cases.

Taxpayers having tax excellent exceeding Rs 1 lakh mustn’t look ahead to the final date to file earnings tax returns (ITR) as they may very well be charged curiosity on the unpaid tax quantity whilst the federal government on Saturday prolonged the deadline for submitting ITRs, officers and consultants mentioned.

The federal government on Saturday prolonged deadlines for furnishing numerous ITRs and audit studies as a aid to taxpayers from Covid-19 pandemic, however there isn’t a clarification on the side of curiosity waiver. Except clarified explicitly, taxpayers must pay curiosity on the excellent quantity with impact from July 2020, not less than 5 tax consultants and officers mentioned requesting anonymity.

“The CBDT (Central Board of Direct Taxes) has prolonged the due date for submitting of the ITR for the Evaluation 12 months 2020-21 to 31-12-2020 for non-audit circumstances and 31-01-2021 for audit circumstances, however no aid has been supplied from the curiosity chargeable underneath Part 234A if the tax legal responsibility exceeds Rs. 1 lakh,” Naveen Wadhwa, DGM at tax consultancy Taxmann mentioned. CBDT, an arm of the Union finance ministry, regulates issues associated to the earnings tax.

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The not too long ago amended income-tax regulation offers for the levy of curiosity on the charge of 1 per cent per thirty days on the excellent tax legal responsibility for the interval of default in submitting of return of earnings. The not too long ago amended regulation – the Taxation and Different Legal guidelines (Rest and Modification of Sure Provisions) Act, 2020 – exempts small taxpayers, corresponding to salaried class and pensioners having a single supply of earnings, from curiosity burden throughout the prolonged interval supplied their particular person tax liabilities don’t exceed Rs 1 lakh, individuals talked about above mentioned.

“The CBDT will challenge essential notification with regard to the extension of the deadlines in the end, which can make clear points corresponding to curiosity charged on the excellent tax quantity,” one of many officers, who works within the finance ministry, mentioned. E mail queries despatched to the finance ministry and the CBDT went with none response.

If the full tax deposited by the use of tax deducted at supply (TDS) and advance-tax fall quick of the particular tax legal responsibility, the deficiency in fee of tax is met by fee of self-assessment tax, Wadhwa mentioned.

“Thus, if self-assessment tax legal responsibility of a taxpayer exceeds Rs 1 lakh, he could be liable to pay curiosity underneath part 234A from the expiry of authentic due dates, i.e., 31-07-2020 or 31-10-2020. The curiosity underneath part 234A shall not be levied if the self-assessment tax legal responsibility of taxpayer doesn’t exceed Rs 1 lakh and ITR is filed inside the prolonged due date, i.e., 31-12-2020 or 31-01-2021,” he mentioned.

Archit Gupta, founder and chief govt officer (CEO) of monetary expertise platform ClearTax, mentioned, “Please word, no formal notification is issued by the (income-tax) division thus far. Responses are primarily based on the press launch (issued on October 24).”

Kapil Rana, chartered accountant and founding father of HostBooks Ltd, a cloud-based accounting platform, mentioned that small taxpayers whose, self-assessment tax legal responsibility is as much as Rs 1 lakh, wouldn’t be required to pay curiosity on the excellent quantity. “Different taxpayers who don’t fall underneath this class shall have pay curiosity underneath Part 234A from the due date as talked about underneath Earnings Tax Act… as could also be relevant,” he mentioned.

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