The Income Tax Department on Wednesday said it will refund the excess interest and late fee paid by taxpayers due to software error while filing ITR for 2020-21.

The last date for filing ITR for last financial year has been extended till September 30, 2021, from July 31 to give taxpayers compliance relief during the pandemic.

However, some taxpayers complained that interest and late fee was charged while fil‌ing income tax return (ITR) after July 31, 2021.
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Responding to a news report saying that many taxpayers were charged late fee while filing ITR despite the last date for it being extended, the I-T Department said on Twitter, “The ITR software was rectified on 1st Aug 2021 itself to remove the error due to incorrect computation of interest u/s 234A and late fee u/s 234F. Taxpayers have been advised to use the latest version of the ITR preparation software or file online.”
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Today, the tax department said that the ITR software was rectified on 1st August itself to remove the error due to incorrect computation of interest. It also said that taxpayers have been advised to use the latest version of the ITR preparation software or file online. 

“If, by any chance, someone has already submitted the ITR with such incorrect interest or late fee, the same will be correctly calculated while processing at CPC-ITR and the excess amount paid, if any, will be refunded in the normal course,” the department wrote on Twitter.

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Finance Minister Nirmala Sitharaman too has raised issues with new return filing software in the past. Soon after the launch of the new software, the finance minster said: “The much awaited e-filing portal 2.0 was launched last night 20:45hrs. I see in my TL grievances and glitches. Hope @Infosys & @NandanNilekani will not let down our taxpayers in the quality of service being provided. Ease in compliance for the taxpayer should be our priority.”

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Nangia & Co LLP Partner Shailesh Kumar said it is common to have errors or bugs in ITR or any other e-filing utility. After realising the errors/ bugs, the I-T Department releases new version of such e-filing utility, removing the error.
The Central Board of Direct Taxes (CBDT) had launched a new income tax e-filing portal in June. However, the new portal had a rocky start from the day of its roll-out as it continued to face technical glitches. This prompted Finance Minister Nirmala Sitharaman to convene a meeting on June 22 with the executives of Infosys, which developed the new portal.