The income tax department has launched a new feature on the income tax e-filing website that allows an individual to pay income tax later. This means that an individual can continue to file ITR without paying the pending income taxes first. Once the ITR is filed, then the income tax amount can be paid, albeit with some conditions. Earlier the ITR could only be filed once the due taxes were paid.
“Income tax department has given an option of pay later when we file income tax return (ITR). Therefore, an individual can file an ITR without paying income tax dues first by using the pay later option,” said CA Abhinit Singh, Founder, Ready Accountant, a Kolkata-based educational institution.
Read below to find out how to use the ‘Pay Later’ option on the Income Tax Department’s e-filing portal.
Pay later facility is available for this tax payment
According to Mihir Tanna, Associate Director (Direct Tax), S K Patodia & Associates, a Mumbai-based CA firm, “The ‘Pay Later’ option can be used for payment of self-assessment taxes only at the time of ITR filing.”
Singh of Ready Accountant adds that the pay later option cannot be used for tax payments like advance tax, TDS and others.
What will you lose if you use this option?
There are certain things an individual needs to keep in mind while using the ‘pay later’ option. Once you select this option while filing ITR, firstly, it will say ‘You may be considered as assessee in default’. Secondly, it will say ‘You may be liable to pay interest on tax payable.
Sujit Bangar, founder, TaxBuddy, a tax filing platform said, “An individual will be considered assessee in default if penal interest is applicable on tax dues. Once an individual is treated as an assessee in default, the income tax department can initiate all measures for recovery of such taxes.”
According to the income tax department helpdesk agent, an intimation notice will be sent to the individual after the ITR is processed. This notice will mention that you have a tax amount due and to pay that as soon as possible. Post that, an individual will get 30 days to pay income tax dues with no penal interest levied. If the tax dues are paid after 30 days, then penal interest will be applicable.
However, tax experts have divided opinions about the one-month period. Both Bangar and Tanna argue that the individual is at default from the moment he/she opted for the pay later option. Hence, penal interest will be applicable at 1% on tax dues. An additional penal interest of 1% will be applicable if tax dues are paid after 30 days.
Amarpal S. Chadha, Tax Partner and Mobility Leader, EY India says,“If the taxpayer has opted to ‘pay later’ option, the taxpayer must remit the taxes along with any interest and fee, if any, at the earliest and in any case, within 15 days from the date of intimation of the ITR being considered as defective. If the ITR remains defective even after the 15 days’ timeline, the same will be considered as invalid return and other provisions shall apply as if the taxpayer has not filed the return in addition to adverse consequences of non-payment of self-assessment tax.”……Read More
Source By: economictimes
