Extended deadlines. Payment of self-assessment tax

Updated: Jul 15, 2020

If we see that there's no definite last date for self-assessment tax payment. A taxpayer is expected to first deposit self-assessment tax, and then to file income tax returns for the particular financial year. Typically the last date to file ITR for individuals, HUF, partnership firm was Audit is not applicable is July 31 (unless extended by the government), hence, it is assumed that the last date of making payment of self-assessment tax is also July 31.

The income tax department has extended deadlines. Payment of self-assessment tax, in case of tax liability up to INR 1,00,000 can be made till 30th November 2020. Which means Taxpayer whose tax liability is above INR 1,00,000 the last date of making payment of self-assessment tax is 31st July 2020.

In case taxpayer whose tax liability is above INR 1,00,000 missed the 31st July 202 deadline, they will also have to pay interest under section 234A while making payment after the due date.

Typically interest under section 234A is levied if self-assessment tax liability payment is made after the due date of filing an income tax return (ITR). Interest is levied at one per cent per month or part of a month on simple interest basis. However, for FY 2019-20 (AY 2020-21) it will be levied to those taxpayers whose tax liability is above INR 1,00,000 by assuming that their original tax return filing due date is 31st July 2020 (Which is the normal date for filing ITR) even though the department has extended ITR filing due date to 30th November 2020.

If the self-assessment tax is deposited after July 31, 2020, here's how penal interest will be calculated: Let us say Mr June self-assessment tax due for FY 2019-20 is INR 2,00,000. He makes the payment on October 20, 2020. As his self-assessment tax liability exceeds INR 1,00,000, he will be liable to pay penal interest. The interest will be calculated from August 1 to October 20, 2020, i.e., two months and 20 days. However, even though he paid the tax due on October 20, i.e., on the twentieth day of the month, he will have to pay penal interest for three months. This is because 20 days of October are considered part of the third month. Due to this, Mr June will have to pay a penal interest amount of INR 6,000.

Source- (Twitter, Income Tax India)

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