Filing relief: Taxpayers may have to cough up interest

As per the clarification appended to the Circular extending the dates for filing tax returns, it has been clarified that the extension of the due date shall not be applicable in respect of provision of section 234A.

The implication of this will be that despite filing the return in the extended period, the taxpayers shall be required to pay additional interest at the rate of 1 per cent per month from the original due date of filing tax return i.e. July 31, 2021 in the case of ordinary taxpayers and October 31 in the case of taxpayers who are required to get their accounts audited, in case the balance amount of tax payable i.e. self-assessment tax payable exceeds Rs 1 lakh.

Though the government has extended the due date of filing return but has specifically provided that despite extension of due date, interest at the rate of 1 per cent shall be required to be paid in case the balance tax payable exceeds Rs 1 lakh. “Technically, the only relief by this Circular is non-levy of fee of Rs 5,000 for late filing of return under section 234F of the Act,” eminent tax expert Ved Jain said.