The pandemic led the Government of India to provide relief by extending the ITR filing for the financial year 2020-21 till September 30, 2021. Keeping the hardships caused due to Covid-19, the government has given multiple extensions to the taxpayers last year also. Under sections 234A, 234B and 234C of the Income Tax Act 1961, the taxpayer has to pay interest on the outstanding tax.
In order to provide relief to taxpayers, the government has extended the deadline for tax filing (ITR) till 30 September for FY21 due to the ongoing pandemic. The government had given multiple such extensions to taxpayers last year also, considering the hardship caused by covid-19.
However, the extension of the deadline doesn’t provide a relief from penal interest charges that a taxpayer is supposed to pay if there is an outstanding tax liability, whether under self-assessment tax or advance tax.
However, like last year, the government has provided relief under Section 234A to those taxpayers whose self-assessment tax is more than ₹1 lakh. Interest will be levied in case the tax liability of the person is more than ₹1 lakh. So, even if the deadline is extended till 30 September, you will have to pay interest at the rate of 1% for August and September, if your tax liability is more than ₹1 lakh.
If a person has not paid advance tax or has paid 90 percent of the tax liability, he/she also has to pay an interest rate of 1 %under section 234B. The defaulter’s payment of advance tax installment is also required to pay interest under section 234C.
The taxpayers need to pay an interest of 15 percent,45 percent,75 percent, and 100 percent advance tax by the 15th of June, September, December, and March. A decrease in the advance tax payment can result in a 3 percent interest in that quarter.
