Income Tax Returns | CA in Mumbai | Chartered Accountant | ITR Filing

Buggy Income Tax Portal Levies Late Fees Despite Extension India 2021

Buggy Income Tax Portal Levies Late Fees Despite Extension India 2021. The New IT (Income Tax) Portal launched is June is very buggy and ridden with issues. I have written about it in my previous article Issues with New Income Tax Portal

Infosys has been paid Rs 164.50 crores out of total outlay of Rs 4,241.97 crore from the taxpayer’s money to create this pathetic portal 🙁.
Due date for filing Individual Income Tax Return (ITR) for F.Y. 2020-21 (A.Y. 2021-22) was extended from 31st July 2021 to 30th September 2021. But new income tax portal is levying late fees after 31st July itself (i.e. As on 1st August). 

Here is actual example that I encountered while filing up the return of our client

If you actually paid without knowing this the you would eligible for a refund. Contact our office to know more on this

As per latest from Finance Ministry, all issues will be resolved by first week of August. So, please keep your fingers crossed and keep patience.

Lets understand the Late Filing Penalty Rules

Under this section, the fee (penalty) is levied if the Income-tax return is not filed within the due date. It is likely to be increased from 1st April 2018 onward as per Section 234F of the Income Tax Act. Provisions of Section 234F of the Income Tax Act are as follows. 

Applicability of section 234F of the income tax

In pursuance of the section, 234F shall be drawn if the below requirements are met –

1. The assessee is required, in accordance with the provisions of section 139, to file an income tax return;

2. The assessee either did not file or postponed the filing of the said income tax return.

Section 234F: New penalty for late filing of Income Tax Return under section 234F is introduced in Budget 2017. This penalty is applicable for the assessment year commencing from the 1st Day of April 2018. If a person who is compulsorily required to file Income Tax Return (ITR) under section 139, doesn’t file the return on time then he is liable to a penalty as follows 

Total IncomeReturn filedFee (Penalty)
Exceeds Rs. 5 LakhOn or before 31st December of Assessment Year but after due dateRs. 5,000/-
In any other caseRs. 10,000/-
Upto Rs. 5 LakhAfter due dateRs. 1,000/-

 

The purpose of the implementation of the penalty under Section 234F?

In order to improve tax compliance, it is essential that income tax returns be filed within the time limit set out in section 139(1). Section 234F has now been applied to the Income Tax Act. Furthermore, the shortened time limits suggested for the assessment under different sections are also based on the pre-requisite that returns are submitted on time.

What is expected?

According to us, tax filers should wait till the department updates the software and removes the late-filing fee. Given that the tax filing software does not allow filing of returns without paying the late filing fee first, we are advising our clients to wait till department resolve these issues.

Conclusion

Getting refund of late filing fee can be a more tedious task; we have time to file the return, so we should wait. If you are planning to file your return, wait till the income tax department updates this buggy Income Tax Portal. 

DISCLAIMER

Comments