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October 24, 2020

Tax Payment Due Date for FY 2019-20 extends till 31st December, 2020 if liability is less than Rs 1 Lakh

by CA Shivam Jaiswal in Income Tax

Tax Payment Due Date for FY 2019-20 extends till 31st December, 2020 if liability is less than Rs 1 Lakh

In a major relief to taxpayers, the Government announced an extension of the due date for filing income tax returns for the assessment 2020-21 by another month to December 31, 2020. The government also extended the date of filing returns by taxpayers (including their partners) who are required to get their accounts audited and those who are required to furnish a report in respect of international/specified domestic transactions by two months to January 31, 2020.

The economic impact of the 2020 coronavirus pandemic in India has been largely disruptive. The lockdown though necessary has led to a disastrous impact on the economy. With an ever-increasing corona virus cases, lockdown was considered as an only solution to flatten the curve. However, the measures which were implemented to avoid a human disaster, have in turn led to the birth of several issues such as unemployment, recession, hindrance to economic growth, financial instability and so on.

The Government of India announced a variety of measures to tackle the situation, from food security and extra funds for healthcare and for the states, to sector related incentives and tax deadline extensions. With the ongoing COVID -19 pandemic a lot of income tax due dates were extended by The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 read with Notification No. 35 /2020, dated 24-06-2020. In view of the same, the due date of furnishing ITR for FY 2019-20 till 30th November, 2020. The Central Board of Direct Taxes (CBDT) has notified and released various ITR forms for different purposes.

What is self-assessment tax?

  • Self-assessment tax refers to any balance tax that has to be paid by an assessee on his assessed income after the TDS and advance tax have been taken into account before filing the return of income.
  • The IT return cannot be submitted to the IT Department till the time the taxes have been paid.
  • At the end of the year, if there is any tax that is pending before filing the ITR, there is a final amount that has to be calculated which is known as the Self-Assessment Tax.

Extension of self-assessment tax for small taxpayers

To provide relief to small and middle-class taxpayers, the said notification dated 24th June, 2020 had also extended the due date for payment of self-assessment tax for the taxpayers whose self-assessment tax liability is up to Rs. 1 lakh. Accordingly, the due date for payment of self-assessment tax for the taxpayers who are not required to get their accounts audited was extended from 31st July, 2020 to 30th November, 2020 and for the auditable cases, this due date was extended from 31st October, 2020 to 30th November, 2020.

In order to provide further relief to small and middle-class taxpayers in the matter of payment of self-assessment tax, the due date for payment of self-assessment tax date is again extended. Accordingly, the due date for payment of self-assessment tax for taxpayers whose self-assessment tax liability is up to Rs 1 lakh has been extended as follows:

Types of TaxpayersOlder Due date of furnishing ITRExtended Due date of furnishing ITRDue date of payment of self-assessment tax, when liability is up to Rs 1 lakh
Taxpayers (including their partners) who are required to get their accounts audited31st October, 202031st January, 202131st January, 2021
Taxpayers who are required to furnish report in respect of international/specified domestic transactions30th November, 202031st January, 202131st January, 2021
Other taxpayers who dont require Tax Audit 31st July, 202031st December, 202031st December, 2020

Section 140A(3) of the Income Tax Act deals with the penalty for non-payment of self-assessment tax. As per section 140A (3), if the taxpayer fails to pay the self-assessment tax (either wholly or partly) or interest or fee, then, such taxpayer shall be treated as an assessee in default. In such a case, the penalty would be imposed by the assessing officer as per his discretion.

As per section 140A (3), in case the taxpayer defaults in making payment of the whole or part of self-assessment tax or interest or fees, then, such taxpayer shall be ‘deemed to be an assessee in default’ to the extent of the unpaid tax or interest or fee. Section 221 (1) levies penalty under the case when the taxpayer is ‘deemed to be an assessee in default’. As per said section, the penalty in such case would be an amount as directed by the Assessing Officer (AO). However, the maximum amount of penalty cannot exceed the amount of tax in arrears.

This extension has proved to be a welcome relief to the taxpayers with cash flow problems who had difficulties in meeting tax reporting or payment obligations or were otherwise facing hardship. If the due date was not extended penalties and interest for non-payment of self-assessment tax would be levied on small taxpayers who have difficulties in making ends meet in this scenario.

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