7 Self assessment tax liability for FY19-20 over Rs 1 lakh?

Central Board of Direct Taxes (CBDT) has presented a fresh batch of announcements in a Press Release on June 24, 2020, on account to stabilise the COVID-19 shaken economic status of India. They included the proposal to extend tax payment date for the Self-Assessment Taxpayers who have tax liability of up to INR 1 lakh. Instead of the compulsion for self-assessment tax payment by July 31 in the AY 2020-2021, the taxpayers with tax liability of up to INR 1 lakh in FY 2019-20 can now make the payment of Self-Assessment Tax by November 30.

But, this benefit is applicable only for those small scale or middle class taxpayers with maximum tax liability of up to INR 1 lakh. For those individual taxpayers, who have to pay more than INR 1 lakh Self-Assessment Tax should clear their due by July 31, 2020, otherwise, they may have to pay the penal interest as per Section 234A of IT Act, 1961 and fee based on their delay period.

Delay in Income Tax payment u/s 234A of IT Act

If the self-assessment tax liability of a taxpayer is below 100000, then the interest penalty will not be levied  u/s 234 A  for delay filing of income tax return of fy 2019-2020.

However, in case the self-assessment tax liability is above RS 100000  this relief will not be applicable.

Krishna Gopal Varshney, Founder & CEO at tax consultancy firm MYITRONLINE Global Services Private Limited said, Since it is expected that the disruption caused by Covid-19 will more extend, further extension of these filing deadlines would be a breather and will enable the businesses to deal with disruption.

Note: ITR Filing Due Date for FY 2019-20 is extended to November 30, 2020 as a recovery scheme of COVID-19 crisis.

Procedure of Self-Assessment Tax Calculation

Self-Assessment tax computation has to be done by the taxpayer himself/herself once Tax Deducted at Source (TDS) and Advance Tax is found correctly. Its purpose is to deposit the balance tax liability amount that remains in hands of the taxpayer at the end of a FY arising after computation of the given tax components:

• TDS: Tax paid by the payer to IT Department of India and hence deducted from the assessee’s income.
• Advance Tax: Tax amount paid based on estimated income that bears a tax liability of INR 10,000 or more as per Section 208.

Form 26AS is an important document for an assessee to compute Self-Assessment Tax amount. In this statement form, issued by IT Department of India every FY, details of tax credit is available to an assessee as per TDS and Advance Tax data, based on the valid PAN details of the taxpayer as recorded by the Department.

Conditions of Self-Assessment Tax Payment Procedure

• Self-Assessment Tax should be deposited by an assessee to IT Department of India in an AY before filing ITR in an AY.  
• Self-Assessment Tax should be computed by deducting all available tax credits, such as, Advance Tax, TDS, TCS, MAT/AMT credit and applicable reliefs available u/s 87A/90/90A/91.
• Challan 280 is required to be filled at the time of Self-Assessment Tax payment. Self-Assessment details should be filed in ITR Return mandatorily by an assessee, such as, BSR Code, Date of Deposit, Serial Number of Challan and Self-Assessment Tax Amount, otherwise may lead to Tax Demand from IT Department during the time of ITR processing.
• Self-Assessment Tax payment due date is not specified in Income Tax Rule. As per its payment condition before filing ITR, whose usual final due date is July 31 in an AY, it is advisable to pay Self-Assessment tax before this due date in order to avoid any penalty of interest payment as per 234A.
• Self-Assessment Tax can be paid online, provided the assessee should have Net Banking facility available with his/her payment transferring bank account, valid PAN and TAN details.

Penal interest u/s 234A is levied @1% per month or part of month in simple interest basis to an assessee, if he/she pays the Self-Assessment Tax amount after the due date (on or before ITR filing date).

Also, Read: "All About New GST Amnesty Scheme w.e.f. 01-04-2023".

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