ITR filing last date FY 2024-25 extended: Will penal interest be charged if final tax paid after July 31? Here's what experts say

Time of India

7 hours ago

This extension for ITR filing AY 2025-26 applies to taxpayers whose accounts do not require auditing, including salaried individuals, NRIs, and pensioners. (AI image)
ITR filing last date FY 2024-25: The Income Tax Return filing deadline or last date for FY 2024-25 has been extended by the Income Tax Department this year. Unlike every year, when the last date for ITR filing is July 31, this year it has been extended to September 15.
This extension for ITR filing AY 2025-26 applies to taxpayers whose accounts do not require auditing, including salaried individuals, NRIs, and pensioners.
July 31 is generally the due date for self-assessment tax deposits. This tax is the amount payable after accounting for TDS, TCS and advance tax payments. Should taxpayers submit a belated ITR and pay self-assessment tax after the original due date, they become liable for penal interest under Section 234A on the outstanding self-assessment tax, according to an ET report.
A significant question arises regarding whether the extension to September 15, 2025, also covers the self-assessment tax payment deadline for FY 2024-2025 (AY 2025-26), allowing taxpayers to avoid penalties.
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Regarding penal interest applicability post July 31, 2025, Tarun Garg, Director, Deloitte India, tells ET, "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.
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Interest charges under Section 234A of the Act shall be waived if the requisite tax amount is paid by 15 September 2025. This interpretation aligns with the Supreme Court's judgement in "CIT vs. Prannoy Roy [309 ITR 231 (2009)]", and CBDT Circular No.
2/2015, which acknowledged the Court's verdict, Tarun Garg noted.
Tarun Kumar Madaan, Practising Chartered Accountant was quoted as saying, "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."
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Penal Interest Implications for Advance Tax
Taxpayers must bear penal interest charges for any shortfall or non-payment of advance tax during FY 2024-25 (AY 2025-26).
Under Section 234B, penal charges apply when advance tax remains unpaid by specified deadlines. Similarly, Section 234C penalties are enforced when advance tax payments fall below prescribed amounts.
The extension of deadlines does not affect the application of penal interest on advance tax deficiencies.
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."
Both Sections 234B and 234C carry a penal interest rate of 1% monthly.
For self-assessment tax payments made after September 15, 2025 (extended ITR filing deadline), authorities will levy penal interest at a monthly rate of 1%.
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