The taxpayers are required to pay interest on the outstanding tax, under three sections 234A, 234B and 234C of the Income Tax Act 1961
In view of the coronavirus pandemic, the Income Tax Department has extended the deadline for filing ITR for the financial year 2020-21 till September 30, 2021.
According to a leading news channel, in case of delay in paying the income tax or if there has been an outstanding, the taxpayer is required to pay interest on the outstanding tax, under three sections 234A, 234B and 234C of the Income Tax Act 1961.
In case you miss a deadline, the interest will be charged at the rate of 1% every month on the outstanding tax amount as per section 234A. Even if you miss a date by 5 or 6 days, you will be charged for the whole month because a delay of 6 days will be considered as a delay of one full month.
If your self-assessment tax is up to Rs 1 lakh then you will get a relief under section 234A. But if the tax liability is more than Rs 1 lakh, you will have to pay interest on the delay. So even though the deadline for filing income tax returns is September 30, if your tax liability is more than Rs 1 lakh, you will have to pay interest at the rate of 1 per cent for August and September.
Similarly, under section 234B, if a taxpayer has not paid advance tax or has paid less than 90 per cent of the tax liability, then he will also have to pay interest at the rate of 1 per cent.
Interest is levied on defaulters of payment of advance tax instalments under section 234C. Taxpayers have to pay 15 per cent, 45 per cent, 75 per cent and 100 per cent of advance tax by the 15th of June, September, December and March. If there is a shortfall in advance tax payment, an interest of 3 per cent is charged in that quarter.
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