ITR filing due date extended but deadline to pay final tax without penalty is July 31 or Sept 15 now for FY 2024-25?

Time of India

6 days ago

Will penal interest be applicable if self-assessment tax is deposited after July 31, 2025?
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Penal interest will be applicable on advance tax
What is penal interest on delay in payment of self-assessment tax?
The income tax department has extended the due date to file an income tax return for FY 2024-25 (AY 2025-26) from July 31, 2025, to September 15, 2025. The last date to file the ITR has been extended beyond July 31 for taxpayers whose accounts are not required to be audited, such as salaried taxpayers, NRIs, and pensioners.Typically, July 31 is also the due date for taxpayers to deposit their self-assessment tax . It is the amount of tax that a taxpayer is liable to pay after deducting the TDS, TCS and advance tax payments. If a belated ITR is filed (i.e., the income tax return is filed after the due date) and the self-assessment tax is also paid after the due date, then the taxpayer has to pay penal interest under Section 234A on the self-assessment tax due.The deadline to file ITR has been extended, but does this mean taxpayers can deposit their self-assessment tax without penalty till September 15, 2025, i.e., has the due date for payment of self-assessment tax for FY 2024-2025 (AY 2025-26) also been extended? ET Wealth online asks experts for their opinions:Also Read: What are the changes in the Form 16 this year? Tarun Garg, Director, Deloitte India, says, "Interest under Section 234A of the Income Tax Act, 1961 is applicable when the ITR is filed after the due date as specified under Section 139(1), and the self-assessment tax remains unpaid as of that due date. With the ITR filing due date for FY 2024-25 (AY 2025-26) being extended to 15 September 2025, this revised date will be considered as the "due date" for the purposes of Section 234A. Accordingly, interest under Section 234A of the Act will not be levied provided the due amount of tax is paid on or before the extended timeline of 15 September 2025. This position is supported by the Supreme Court's ruling in CIT vs. Prannoy Roy [309 ITR 231 (2009)], and CBDT Circular No. 2/2015, which accepted the Court's decision."Also Read: Income tax slabs for ITR filing FY 2024-25 are different Tarun Kumar Madaan, Practising Chartered Accountant, says, "In the present case, since the due date under Section 139(1) has been extended to 15th September 2025, interest under Section 234A should not be applicable if the ITR is filed, and the entire self-assessment tax is paid, on or before this extended date. In several past instances where the due date for filing the return was extended, the CBDT had expressly clarified that such extension would not apply for the purposes of Section 234A, and interest would still be computed from the original due date. However, Circular No. 6/2025 contains no such caveat. Given that the extension has been granted due to reasons beyond the taxpayer's control (such as non-availability of return filing utilities), it is reasonable to interpret that no interest under Section 234A should be charged if the return is filed by 15th September 2025."Shubham Jain, Associate Director, Nangia Andersen India, says, "Interest under section 234A is chargeable at the rate of 1% on unpaid tax if the ITR is filed beyond the due date specified in Section 139(1). The CBDT circular announcing the due date extension specifies that the due date itself, as provided under Section 139(1), has been extended from July 31, 2025, to September 15, 2025. Thus, interest under Section 234A should technically not be levied in cases where the ITR is filed after 31 July but before 15 September. Further, considering that the ITR due date extension has been announced much before the release of the ITR utility, one would hope that the date extension would be natively built into the ITR utility, as otherwise the ITR utility would automatically levy the interest under Section 234A if the return is filed after 31 July 2025."It is important to note that taxpayers will have to pay penal interest for the non-payment/shortfall of advance tax payments for FY 2024-25 (AY 2025-26), as is the norm. Penal interest under Section 234B is applicable if the taxpayer has not paid advance tax in full by the due dates. Penal interest under Section 234C is levied if the taxpayer has paid advance tax less than the prescribed amount.Even though the due date is extended, the penal interest on non-payment/shortfall of advance tax will continue.Garg says, "Although the ITR filing deadline has been extended, interest under Sections 234B and 234C of the Act will continue to be applicable."Madaan says, "The penal interest under Section 234B and Section 234C is independent of the tax return filing due date and continues to apply where advance tax provisions are not complied with. The extension of the tax return filing due date does not affect the computation or applicability of interest under Section 234B and Section 234C."Penal interest at 1% per month is applicable for both Section 234B and 234C.If self-assessment tax is paid after the extended due date for ITR filing, i.e., September 15, 2025, then penal interest at 1% per month will be applicable.