Extension of Due Date of Income Tax Return – Is It A Myth

Sekar K

Covid 19 and subsequent lockdown for the last 3 months has created immense hardship to one and all. Particularly in Tamilnadu there is strict lockdown till 30^th June 2020 and uncertainty exists as to whether normalcy would return in the near future considering the rising cases day by day.

In this scenario, filing of income tax returns by all assessees more so by Individuals is a task which has become very complex. As banks are not fully working & auditor offices are closed, many of the Senior Citizens are unable to get their pension certificates, Interest certificate etc. Even after the lock down is lifted only important functions of banks/financial institutions would resume.

It was a great sigh of relief when Finance Minister announced on 13^th May 2020 that the due date of Filing returns for the Financial year 2019-20 (AY 20-21) is extended up to 30^th November 2020. This extension is not a big relief for Corporates & Non corporates subject to compulsory audit as anyhow their original due date was 31^st October 2020. This was a major relief for Individuals and firms who are not subject to audit having original due date as 31^st July 2020.

The Government has now issued a Notification on 24^th June 2020 wherein the above extension has been confirmed.

But, if the notification is read further, there is a greater problem. The notification specifies that it is not an unconditional extension of due date. The Interest for delayed filing of return i.e. Section 234A of the Income tax act is applicable for the extension with certain exemption. This implies that there is no real extension of time limit but Extension with levy of Interest. The notification provides that if the Self-assessment tax payable (total tax minus advance tax /tds/other reliefs) is up to Rs.1 lakh, then there will not be any interest liability and so if it exceeds Rs.1 lakh Interest Under Section 234A is leviable.

This would create considerable hardship to the Public at large. Most of the Salaried employees in addition to their salary income have income from rent, taxable capital gains and interest income. Similarly, Senior citizens are having income from rent, taxable capital gains. They would not be in a position to pay the self asst tax as they require the assistance of a tax consultant. Today the tax consultant offices are closed and everything cannot be done through emails. In Tamilnadu, due to continuous lock down and fear most of the Senior citizens have left to their native places. As inter district movement is banned, they will not be able to reach their permanent residence for a considerable period. This may be the case in most of the states. As they do not have the interest liability on advance tax, they normally pay the tax on filing the due dates. The said Senior citizens were under the bonafide belief based on the Announcement of the Government in May 2020, that filing of income tax return can be made till 30^th November 2020. Though the interest liability is fastened for those whose self asst tax payable is Rs. 1 lakh and above, there would be large number of Senior citizens and other Salaried employees who will e fall under this category.

The Government should not differentiate assessee’s based on their tax payment. It would discourage people from paying their due taxes if interest is levied for this period.

Saint Tiruvalluvar, has said about 2000 years back that “Generous Grants, Compassion, Righteous Role & Succor to the downtrodden are the hall mark of Good Governance”. The Government when it gives a concession should be gracious and must be given whole heartedly without any strings attached. Hope the Government would understand the hardship caused particularly to the Senior citizens and others in States where the Covid 19 pandemic is in its peak and remedial action would be taken.