The Ministry of Finance has not extended the due date of filing of return of income for non-audit cases beyond 10th January 2021 and for instance if an individual files a return of income declaring income between Rs. 2,50,000/- (Rupees Two Lakh and Fifty Thousand only) and Rs. 5,00,000/- (Rupees Five Lakhs only), though he need not pay any tax because the entire tax payable is allowed to be deducted as rebate under section 87A, his return can be uploaded on payment of late fee Rs. 1,000/- (Rupees One Thousand only) payable u.s 234 F. But if it is Rs. 5,00,100/- (Rupees Five Lakhs and One hundred only) i.e. Rs. 100 more, he cannot file the return of income unless he pays Rs. 25,100/- (Rupees Twenty Five Thousand and One Hundred only), as per the calculation given below:

Income Tax on Rs. 5,00,100 – 12,520*
Cess @ 4%      501
Interest  u.s. 234A   130
Interest u.s 234B 1300
Interest u.s 234C   652 2,082
Total Tax and Interest including Cess 15,103
Add; Late Fees u.s 234F 10,000
Total Tax and Late Fees 25,103
Round off to the nearest Ten 25,100

*(the tax rates are applicable from Rs. 2,50,000 i.e @ 5% from Rs. 2,50,000 to Rs. 5,00,000 is Rs. 12,500 and Rs. 20, which is 20% on Rs.100)

For an additional income of Rs. 100/- the assessee has to pay an whooping Rs. 25,100/- (Rupees Twenty Five Thousand One Hundred only)

It is not fair and equitable to burden the assessee to pay such an exorbitant amount. In similar situations in the past marginal relief was provided in the Income Tax Act, while such anomaly was brought to the notice of the exchequer. The marginal relief should be that the tax payable should not exceed the income that exceeds the limit and in the above example the tax will be limited to Rs. 100/- (Rupees One Hundred only) and in addition the late fees of Rs. 10,000/- is to be paid.

Though the Government did not come forward to extend the due dates of filing the Returns of Income, the late fees can be waived to help the business community which is suffering heavily  due to Covid-19 pandemic to a very great extent.

For audit cases also the Tax Audit Reports should have been filed on or before 15th January and the returns should be filed on or before 15th February and if they are not filed in time they have to pay heavy penalty in addition to interest and late fees. In order to help the business community to some extent the Government can think of waiving the late fees and penalty in addition to providing marginal relief in such cases also.

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9 Comments

  1. NARENDRA SEKSARIA says:

    1-NO APPEALS ALLOWED AGAINST LATE FEES THOUGH SINCE INCEPTION LATE FEES UNFAIR NOT BASED ON INCOME GRADATION –BUT REMAINS UNCHALLENGED BY ANY—OR AMENDED –SUFFERER –MSEMS ONLY

    2-U HAVE TO PAY RS10000 OTHERWISE U CAN NOT UPLOAD

  2. Senthil says:

    Respected Mam/sir. Nearly some lacs of MSMEs GST RC cancelled due to non filing of returns. All are missed the GSTAmnesty ended on OCT 1,2020. So to give life & hope kindly give GSTAmnestywithITC from Feb 20 to Dec20 GST returns.Other wise they all will lost their hardly developed Business. In the same way Income tax also huge penalties will destory hope and confident among the assessees. On the sufferings of Covid pandemic all are exepted some kindness and mercy. Govt’s adamant will demotivate the minds of genuine taxpayers. This will mislead them. So on the understanding of the status Govt must extent due dates in all IT and GST. This is the only need from the Hnbl Finance Minister and Hnbl Prime Minister. Thanking you.

  3. Santosh Bhattacharya says:

    In fact, i personally feel, extension of filing date is not the ultimate solution, instead we should change our mind set to abide by the original due date.

  4. P G Mohan Sastry says:

    All business men must fught unitedly for waiver of late fee both in Inocme tax and GST. Because the late fee etc liable to pay by the dealers for late filing of IT and GST Annual returns. Unless the dealers are comeforward practitioners are helpless in this situation

  5. C R K CHARLU says:

    It is really painful for the salaried/sr. Citizen to meet hectic penalty though they are the true tax remitters as there’s no hide and seek Income for them. It would have been appropriate on the concerned authorities to impose limited penalities as was the case during December 2019 for a/y 2019-20.

  6. Sanjay Agarwal says:

    hello
    In case of a prop firm,s if turnover is less than the limit as prescribed by Income Tax Act for Tax audit ,But net profit is below 8% in FY 20-21 in such case entity requires to get its accounts audited by an approved Tax Auditor who will give his report on actual profit.otherwise an assy shall pay min tax on 8% profit of its Turnover . For such assignment of Audit to an tax auditor Prop. it requires to sign some paper through degital Signature .
    Now problem arises entity is not available in India he has been abroad for work from last one year and not carrying his original documents Pan card etc. without these documents degital sig is not possible .Tax report is ready on Statement of Profit & loss account
    How to proceed.

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