How to reduce the criminal interest payable on the tax if the RTI filing is delayed due to problems on the site


If a taxpayer’s self-assessment tax amount exceeds Rs 1 lakh for fiscal year 2020-21, full payment of tax should be made no later than July 31, 2021. If taxes n ‘have not been paid by that due date, then he will have to pay penal interest of 1 percent of the tax due for each month of delay. Click here to read the full story.

However, these taxpayers can avoid further criminal interest if they pay the full self-assessment tax, i.e. any tax still due now i.e. by September 30, 2021.

Why these people should be paying the tax owed now

Penal interest on tax still due / payable is levied under section 234A of the Income Tax Act 1961. Penal interest is collected at 1 percent per month or part thereof from August 1, 2021. If the self-assessment tax is filed by September 30, 2021, then it will be liable to a sentence of only two months. However, if the self-assessment is filed on or after October 1, 2021, then the individual will pay higher penalty interest depending on the date the tax payment is made.

Here is an example to understand how the penal interest will be calculated:

Suppose the self-assessment tax due and unpaid for fiscal year 2020-21 is Rs 2 lakh as of March 31, 2021 and has not been paid so far. If the payment is made by September 30, 2021, then the penalty interest will be calculated for two months. The penal interest will be Rs 4,000. However, if the payment is made in October, the total penal interest will be Rs 6,000. Likewise, if the payment is made in November, then the interest penalties will be Rs 8,000.

Keep in mind that self-assessment taxes are calculated after subtracting the TDS, TCS, and prepaid taxes paid from the total taxes payable for a fiscal year. TDS, TCS, etc. can be verified from an individual’s Form 26AS. This is a tax booklet that contains details of the TDS, withholding tax, and other contributions that have been deposited on the individual’s PAN for a particular fiscal year.

Once the self-assessment tax (as well as the penal interest due up to the date of payment) has been deposited by an individual, the penal interest will not be payable beyond the month in which the entire payment is made. tax is paid, even if the individual files an ITR later. However, the person must file an ITR by the deadline to do so in order to avoid other types of penalties such as late filing fees of up to Rs 5,000 etc. The last filing date for the 2020-21 fiscal year tax return is currently December 31. , 2021. This deadline is applicable for persons whose accounts are not subject to verification.

The process of filing the tax return requires an individual to first calculate their net taxable income, then calculate if they have any tax payable (after subtracting TDS, TCS, etc.), then files the tax. self-assessment. It is only after this that the person can file an ITR using the form applicable to him for the financial year concerned.

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