Extension of due date for filing of Income Tax return for FY 2019-20 & Implications

The Government, on May 13, 2020 announced the extension of income tax return (ITR) filing deadline for FY 2019-20 to November 30, 2020 in all the cases. This has been notified now vide Notification 35/ 2020 dated 24th June, 2020. In this regard, we wish to bring to bring to your kind attention the possible impacts of the extended due dates on the tax liability and the interest obligations.

Please note that the normal due dates for filing Income Tax returns for the FY 2019-20 as per the Income Tax Act are:

Assessee	Audit reports to be filed	Due date for audit report	Due date for filing return of income
Individual / HUF/ AOP/ BOI assessee not liable for audit	NA	NA	31st July
Company assessee not liable for audit under Income Tax Act	NA	NA	31st October
Assessee liable for tax audit and not liable for transfer pricing	Form 3CD	30th September	31st October
Assessee liable for tax audit and liable for transfer pricing	Form 3CD &  Form 3CEB	31st October	30th November
Trusts registered under section 12A	Form 10B	30th September	31st October

It is to be noted that in all the above cases, the due date of filing the return of income has been extended to 30^th November, 2020. Tax audit report and other certificates/report certified by CA as defined under ITA needs to be submitted one month before the due date of return as specified u/s 139 of Income Tax Act. Hence the audit reports are required to be submitted on or before 31^st October, 2020.

However, in order to provide relief to small and middle class taxpayers, the date for payment of self-assessment tax in the case of a taxpayer whose self-assessment tax liability is upto Rs.1 lakh has also been extended to 30th November, 2020. However, it is clarified that there will be no extension of date for the payment of self-assessment tax for the taxpayers having self-assessment tax liability exceeding Rs. 1 lakh. In this case, the whole of the self-assessment tax shall be payable by the due dates specified in the Income-tax Act, 1961 (IT Act) and delayed payment beyond the original due date for filing the return of income would attract interest under section 234A of the IT Act.

Therefore, though the return filing due dates have been extended by the Government, if the tax liability of the assessee payable as self-assessment tax is more than Rs.1 Lakh, the assessee will not get the benefit of extension of due dates. Assessee has to pay interest @1% per month for the delay in filing the return from the original due date mentioned in the Act. This is applicable for all types of assessees including corporate assessees.

Additionally, the assessee will be liable for interest u/s 234B for the period of delay if he has not complied with the advance tax obligations under the Act.

Thus,

• if an individual/HUF/ AOP/ BOI assessee not liable for tax audit files his return of income for FY 2019-20 in November, 2020 instead of July and his self-assessment tax payable is more than Rs.1 Lakh, he has to pay interest of 4% on the tax amount (1% per month for 4 months of delay) as interest u/s 234A for the reason of delay in filing of returns. Further, in this case it is implied that the assessee has not complied with the advance tax payment within 31^st March, 2020 and hence he will also be liable to pay interest u/s 234B for the delayed months which is again be 4% of the self-assessment tax payable.
• For all other assessees (other than assessees liable for transfer pricing audit) whose due date for filing tax return is 31^st October, interest u/s 234A will be applicable @1% for one month if they file the return in November, 2020 and their tax liability is more than Rs. 1 Lakh. Further, interest u/s 234B also will be attracted @1% for one additional month.

 

Hence it is suggested that all the taxpayers whose tax liability is likely to exceed Rs. 1 Lakh for the financial year 2019-20 to file the returns and pay the taxes within the original due dates under the Act to minimize the additional interest liability on the tax amount. The small taxpayers who have estimated self-assessment tax liability less than Rs. 1 lakh can opt to enjoy the benefit of extended due dates if they have complied with the advance tax payments, if applicable, before March, 2020.