1.Introduction of ‘Pay Later’ Feature:
In a quest to enhance the taxpayer experience, the Indian Income Tax Department has introduced an innovative feature on its e-filing portal: the ‘Pay Later’ option. This allows taxpayers to file their Income Tax Returns (ITRs) without the pressure of immediate tax payment.
2. ‘Pay Later’ Feature Highlights:
While this feature aids in providing relief to taxpayers by allowing ITR submissions without upfront tax settlements, there are specific conditions to be kept in mind:
Conditions: This feature specifically caters to self-assessment tax payments during ITR filing. However, it’s worth noting that you cannot defer advance tax and TDS using this option.
3. Consequences:
Making the choice to opt for ‘Pay Later’ isn’t without its repercussions. Taxpayers might find themselves classified as an “assessee in default.” This classification could further result in potential penalties and accrual of interest on the due tax amount.
4. Assessment and Penalty:
After the processing of your ITR, an intimation notice is sent out indicating any outstanding tax amounts. To sidestep penal interest, it’s advisable to complete the payment within 30 days from receiving the intimation. However, there’s a prevailing confusion among many about whether the penal interest starts accruing right from the moment they opt for ‘Pay Later.’
5. Optimal Timing:
The income tax department hasn’t set a rigid timeframe for the settlement of tax payments. However, financial experts strongly advocate settling the dues within the same month of ITR filing. This proactive approach helps in avoiding the piling up of penal interest.
6. Utilizing ‘Pay Later’ Option:
When you reach the final stage of your ITR filing process, you’ll be presented with two options based on the tax amount due: ‘Pay Later’ or ‘Pay Now.’ By choosing ‘Pay Later,’ you can proceed to file your ITR without any immediate tax payment and then verify your filing using the prescribed methods.
7. Ways to Settle Tax Dues Later
For those who’ve opted for ‘Pay Later’, there are two primary routes for settling their tax dues:
- E-Pay Tax Method: Navigate to the e-Pay Tax section on the portal and complete the pending tax payments.
- Tax on Regular Assessment: Upon receiving the intimation notice, follow the stipulated instructions to make the payment.
Remember, failing to comply can usher in additional penalties and interest charges.
8. Conclusion: The ‘Pay Later’ feature is undoubtedly a progressive step, offering a flexible approach to ITR filing without the need for immediate tax payment. Yet, the onus remains on taxpayers to use this feature judiciously and ensure timely settlement of taxes. With wise utilization, taxpayers can truly benefit from a hassle-free and smooth tax-filing experience.
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