Section 234A Interest despite IT return due date extension

Interest u/s 234A – Excited about extension of IT return for FY 2019-20 ( AY 2020-21 ) to 30th Nov’2020 ?

Who wasn’t HAPPY when the due date to file the Income Tax Return got extended to 30^th November 2020 vide Notification No. 35/2020 [F. NO. 370142/23/2020-TPL] dated 24th June 2020

But, did you know that unlike earlier years where there was an extension in the return filing due date, Interest u/s 234A for Interest on delayed filing of IT return would still be applicable if you are an assessee with the below characteristics –

• Original Due Date as per Sec 139(1) : 31^st July 2020 / 30^th September 2020

AND

• Self Assessment Tax liability exceeds : Rs. 1,00,000

AND

• Return is filed after above due dates

Yes you read that right.

Note :

1. Even a Senior Citizen with the above characteristics would have to pay Interest u/s 234A

2. Interest u/s 234A @ 1% per month or part thereof. ( which means you already have to pay 1 months Interest while you read this article in August 2020 )

3. You have roughly 10 to 15 days to save another 1% interest provided you file your return before 31^st Aug 2020

Extract of the Notification as under –

Provided that where the specified Act is the Income-tax Act, 1961 and the compliance relates to-

(i) furnishing of return under section 139 thereof, for the assessment year commencing on the –

(a) 1st day of April, 2019, the end date shall be extended to the 31st day of July, 2020;

(b) 1st day of April, 2020, the end date shall be extended to the 30th day of November, 2020;

Provided further that the extension of the date as referred to in sub-clause (b) of clause (i) of the first proviso shall not apply to Explanation 1 to section 234A of the Income-tax Act, 1961 in cases where the amount of tax on the total income as reduced by the clauses (i) to (vi) of sub-section (1) of the said section exceeds one lakh rupees :

 Link to the notification – https://taxguru.in/income-tax/govt-extends-9-due-dates-income-tax-law-benami-laws.html

The Author Mr. Raj C Doshi is a CA in Practice and Proprietor at R C D & Co., Chartered Accountants, Mumbai.

(Author can be reached at raj@rcdco.in )