Technical glitches on the brand new revenue tax portal could pose a brand new headache for taxpayers — curiosity legal responsibility on account of delay in submitting the returns. Consultants have referred to as for an modification to the Earnings Tax Act to supply reduction for the evaluation yr 2021-22 (fiscal yr 2020-21).
Although the submitting deadline has been prolonged, tax-payers are anxious. The final date for submitting Earnings Tax Returns by salaried individuals and people whose accounts needn’t be audited was prolonged to September 30 from July 31. For tax audit circumstances (firms primarily), the due date has been prolonged to November 30 from September 30.
No provision of reduction
The issue is on account of the supply of Part 234 (A) of the Earnings Tax Act, which prescribes levying curiosity on the charge of 1 per cent on excellent tax if the returns are filed after the due date. Additionally, Sections 234 (B) and 234 (C) levy curiosity in case of default or deferment in cost of advance tax. Nonetheless, the legislation doesn’t have a provision of reduction in case of a delay in submitting of returns because of technical glitches or an issue on the Tax Division’s facet.
In accordance with Shailesh Kunar, Associate with Nangia & Co LLP, taxpayers are required to pay an curiosity of 1 per cent per thirty days for delay in submitting ITR past the unique due date, if the distinction within the precise tax legal responsibility and the combination of TDS/TCS/Advance Tax exceeds ₹1 lakh. Thus, “the curiosity clock of the Earnings Tax Division continues ticking until the precise submitting of the ITR, regardless the rationale of the delay,” he mentioned. This implies curiosity will probably be levied from August 1 as unique due date was July 31.
“Contemplating the hardship confronted by taxpayers because of the new IT portal, which is now acknowledged by the federal government additionally, they need to amend the legislation exempting taxpayers from curiosity for delay in submitting ITR for AY 2021-22. A corresponding change must be launched within the ITR e-filing utilities additionally, to scale back the hardships of taxpayers, who’re any means struggling to conform because of the technical glitches within the new IT portal,” he mentioned.
CA Siddharth Kejriwal, Associate with ML Kejriwal & Co, mentioned that in FY21, the net direct tax collections had been about ₹9.5-lakh crore. “If we had been to imagine that no less than 5 per cent of this tax was being paid on the time of submitting of yr finish revenue tax returns, that will probably be round ₹50,000 crore. On this ₹50,000 crore, curiosity of no less than 1 per cent of tax due will probably be charged underneath three completely different Sections of the Earnings Tax Act. Curiosity on ₹50,000 crore at 1 per cent for shut to a few months will probably be ₹1,500 crore,” he mentioned whereas including that it is a hypothetical assumption and the precise figures could fluctuate vastly.
Additional, he mentioned that this value, nevertheless, is perhaps a lot greater in actuality and compounded by the “variety of treasured man-hours wasted in attempting to work with an awfully peculiar web site.”
https://www.thehindubusinessline.com/news/i-t-portal-glitches-raises-spectre-of-penalty-interest-for-taxpayers/article36085819.ece | I-T portal glitches elevate spectre of penalty curiosity for taxpayers