I also have income from a rental property on top of my personal pension which I get every month so do a tax return each year. I am a senior citizen and I have been filing my tax returns every year before the due date. Dear, He is resident in India as per the Income-tax Act; He is of the age of 60 years or above at any time during the year; He is not having any income chargeable to tax under the head “Profits and gains of business or profession” Hence only self assessment tax need to be paid without any interest. 1 lakh. As per he CBDT’s Press Release dated 24.06.2020 if the Self Assessment Tax payable is more than Rs. Refer the full guideline on Income tax website Understanding what your allowable expenses are, as HMRC calls them, can really help your business. Thanks. gradually in year 2003 in consonance with the state of economy. Carl Lamb of Almary Green responds to our reader. When the Tax Return filing date was extended till 31 December there was no intimation to public either on TV or in newspapers about payment of SA tax by 31July 2020. 1 Lakh the whole of the tax is to be paid by the specified dates i.e. Now i am caught in a bind. While it’s easy to see self-assessment in a negative light, the self-assessment process can actually give you greater control over your taxes and empower you to better manage your business-related finances. Before filing your income tax return (ITR) this year, ensure there is no pending tax payable on your part through self-assessment. c) Taxpayers greater than 60 years i.e. Interest is levied at one per cent per month or part of a month on a simple interest basis. Section 234A Interest for AY 2020-21: Taxpayer’s hopes are normal as usual but results are opposite as expected. For this, you need to … in the case of non-audit cases on or before 31 st July and in the case of audit cases on or before 30 th September and if paid beyond the said dates they have to bear interest under section 234A @ 1% per month or part thereof. 1 lakhs and are normally paying full tax liability through SA tax in the absence of any TDS/Advance Tax vis a vis HNIs, Large corporates, etc.. having total tax liability in crores and resulting SA liability not exceeding Rs. Int. We have gone through enough so please do not make our lives more difficult by making us pay interest on SA amount. However, the 2nd proviso to the said notification prohibits the normal operation of consequential impact of extension of return filing due date. HMRC will simply work out if … Usually, penal interest under section 234A is levied if self-assessment tax is paid after the due date of filing ITR. The only exception to this would be a bank account on which the interest is paid tax-free, such as an ISA. This newspaper has been a central part of community life for many years. It is atrocious for the govt to impose penalty under Sec234A when the last date for filing income tax returns has been extended. SELF-EMPLOYED people will be required to pay interest from February if they choose to break down tax bills into instalments, which could be a blow for … Extension of the tax filing date and applicability of 234A are interrelated and the Finance Ministry could have easily anticipated this impact. Find out who has to complete a tax return for the 2019-20 tax year and how self-assessment works. Further, in past the revenue has conveniently reduce interest rate for refund u/s 244A from its peak of 18% p.a. Rising coronavirus rates mean Norfolk 'highly likely' to go into Tier 3 or 4, Droves of pubs and restaurants shutting down until tier two is over, Warning against Christmas visits to north Norfolk as virus cases surge, William and Kate 'inadvertently' breach rule of six at Sandringham event, Coastal hotel shuts following Tier 4 annoucement, Two people and a dog killed in crash on the Acle Straight, First glimpse of new Alan Partridge series revealed, Fish and chip shop at pub closes after positive coronavirus case. Landlord mortgage interest tax relief from tax year 2017-2018 . First the government and our honorable prime minister asks all citizens and more so the senior citizens to avoid going out of the house to avoid contacting the corona virus and then expects us to pay SA tax before 31July failing which the CBDT slaps a penalty of 1% of the tax due. All Rights Reserved. Finishing your tax return TRG 13 Signing your form and sending it back TRG 14 A rough guide to your tax bill TRG 16 Tax return deadlines and penalties If you: • want to fill in a paper tax return, you must send it to us by 31 October 2020 (or 3 months after the date on your notice to complete a tax … Senior citizens are only required to pay tax in advance if they are having professional or business income. This is a burden for senior citizens who are not required to pay Advance tax and had to wait till Aug 15 to get their Form 26 AS. This is a nice way of showing your appreciation for seniors to obey government instructions and stay at home and then make honest citizens pay penalty under Section 234A. Even I was shocked to get an Interest liability of more than 20000 from my CA. 2019-20 (A.Y. If the self-assessment tax is deposited after the due date, here's how penal interest is calculated. If you complete a self assessment tax return, you should include your non-ISA savings interest on the form as usual. - Credit: Archant. In view of the challenges faced by taxpayers in meeting the statutory and regulatory compliance requirements due to the outbreak of Novel Corona Virus (COVID-19), the Government has issued Notification dated 24th June 2020 under the Ordinance for extension in the time limits for making various compliances falling due between 20th March 2020 to 31st December 2020. HMRC have announced that: The … The following procedure can be followed for the computation of self assessment tax: First calculate taxable amount payable on the individual’s total income with the help of the income tax slabs available online. I would earnestly request the honorable Prime Minister and Finance Minister to waive the interest under section 234A for senior citizens and to make an announcement at the earliest on all TV channels and newspapers. Carl Lamb, managing director of Almary Green. Monday to Friday, 8am to 4pm. In order to submit a comment to this post, please write this code along with your comment: 6baf97130c2d5960755b99846e3b7c60. I normally don't include my ISA interest in my tax return and up to now any tax due on my building society savings has been deducted before I get the interest, although the amounts did need to be included on my tax return. I came to know of this hidden proviso today when filing the return. CA Deepraj Tomar Advance tax: You need to pay advance tax if you are a salaried taxpayer with other sources of income like interest on deposits and your tax liability for the year exceeds Rs 10,000 after your employer has deducted the TDS. Self-assessment and the taxpayer. The Personal Savings Allowance gives basic rate taxpayers up to £1,000 of savings interest free of tax. Thanks for any help. Whether there is any likelihood of any notification for withdrawal of interest under 234A for delay in filing of return even if all due tax has been paid in Aug 2020. Further, several states like (TN,WB, MH) have extended lockdown till 31st July, 2020 because of outburst of COVID 19 pandemic. prevailing in 1990s to 6% p.a. Request early clarification and refund of interest levied since the tax preparation utility is levying the interest. Therefore, as you conveyed that you have invested your retirement benefits(i.e you were in services) or we can say that it can not be treated as business or professional income. Self Assessment Payment Helpline. Every contribution will help us continue to produce local journalism that makes a measurable difference to our community. Kindly take it to tax authorities on behalf of similar tax payers. Interest is levied at one per cent per month or part of a month on simple interest basis. A client has received ppi compensation along with the interest and tax taken off. Greetings, 234B for which there is no relaxation. 2020-21) from original due date of 31st July 2020 (for non-corporate taxpayers not liable to tax audit) and 31st October 2020 (taxpayers liable to audit) to 30th November 2020. Dear sir, The imposition of the 1% additional interest on deferred amount means the exemption was a sham. 9958906850, I am a super senior citizen aged 83 years, Do I have to pay interest under section 234A if I file Return before 31 December 2020 for AY 2020-2021 ? Whether to delay filing my return and piling on the interest or pay it now. Due to Pandemic. In this state of affairs, the honest taxpayers as usual hope and recommend CBDT to review the above provisions of law & refrain from levying interest u/s 234A in AY 2020-21 and to come up with suitable amendment. Do I need to declare the interest on my savings in my tax return? resident senior citizens not having business or professional incomes are exempted from payment of advance tax. Importantly, the interest you get on your ISAs doesn't count towards this allowance as they are already free of tax. I have received appreciation emails from IT department . The said recommendations are based on below rationale: a) The issuance of notification for extension in timelines/compliances itself is extraordinary due to the outbreak of Novel Corona Virus (COVID-19) and its declaration as pandemic by WHO. Thanks & Regards Self-assessment is the process of making your own assessment of your tax liability to Revenue. You just enter the details of the 8% interest part of the PPI refund on your tax return as “savings interest” and put in how much tax was deducted from this. Carl Lamb, managing director of Almary Green. To decide your tax code, HMRC will estimate how much interest you’ll get in the current year by looking at how much you got the previous year. e) Also there seems no rationale for dividing tax payers having SA tax liability below or exceeding one lakh. As a senior citizen, I sincerely request CBDT to review this issue and provide relief as soon as possible as at present Senior Citizens are badliy hit by the Corona and they are not able to go out of home even for treatment. Today I was shocked when I received the tax computation from my CA with interest for non payment of SA amount before 31July’20. In the 2019-20 tax year, you can claim 25% of your mortgage tax relief. After ascerting that Self Assessment IT can be paid online, I have paid my IT along with Interst amount. Interest u/s 234A is most unjustified, more specially for the Senior citizens. The most common source is interest from banks and resultant TDS. Under this circumstance, how can CBDT impose an interest for not paying SA tax in time ? Join our newsletter to stay updated on Taxation and Corporate Law. It should be withdrawn forthwith giving a clear notification in the media. Thanks, As a senior citizen, I sincerely request CBDT to review this issue and provide relief as soon as possible, Your email address will not be published. Greetings, Ramadhar. The Finance Minister or the CBDT shall not remain a mute spectators towards the honest tax payers of this nation . Copyright © TaxGuru. In this case, the whole of the self-assessment tax shall be payable by the due dates specified in the Income-tax Act, 1961 (IT Act) and delayed payment would attract interest under section 234A of the IT Act”. I know the actual compensation in not reported but where on the SA form do I put the interest paid and the tax taken off. This is because expenses reduce your Self Assessment tax bill. “Provided further that the extension of the date as referred to in sub-clause (b) of clause (i) of the first proviso shall not apply to Explanation 1 to section 234A of the Income-tax Act, 1961 in cases where the amount of tax on the total income as reduced by the clauses (i) to (vi) of sub-section (1) of the said section exceeds one lakh rupees”. Self-assessment tax is a type of tax that is paid by the taxpayer in relation to his or her income from other sources. Lockdown, and other factors Bnaks could not give Form-16 before August’20. on non payment of Advance Tax or shortfall in payment of Advance Tax u/s 234B or 234C is payable only when the tax due on your income exceeds Rs.10000/- u/s208 of the Incometax Act. Equally any profit made from buying and selling investment assets held in your ISA will also generally be free of capital gains tax while they're in the ISA wrapper and won't count towards your annual CGT allowance. Any update or representation given so far with the finance ministry on the same.. If you fill in a self-assessment tax form, for example if you are self-employed, then getting the rebate is easy. In other words, the taxpayer is liable to pay simple interest at 1% per month or part of a month for default in payment of advance tax. This means that information you provide to the ATO is initially accepted as being true and correct when you lodge your tax return and other forms on which you disclose your tax liability. Higher rate taxpayers get an allowance of £500, but additional rate taxpayers don't get this allowance at all. Sir you are well aware about the difficulties faced by all citizens and more so by senior citizens due to pandemic. The nature of interest is simple interest. Required fields are marked *, Notice: It seems you have Javascript disabled in your Browser. Telephone: 0300 200 3822. Flat-rate simplified expenses. Even after chasing for so many days in SBI/Baranagar Branch, I have been given only Form-16A only on 24.09.20. For FY 2019-20, the due date for filing ITR has been extended to November 30, 2020. Rate of interest. The 1% interest is unacceptable. In this case, the whole of the self-assessment tax shall be payable by the due dates specified in the Income-tax Act, 1961 (IT Act) and delayed payment would attract interest under … The above said concern in respect of 234A interest shall be leniently modified due to the prevailing situation. Challan No./ITNS 281:- Payment of TDS/TCS by Company or Non Company. This new allowance – which first applies to the 2016/17 tax year – means that the vast majority of savers won't pay tax on their savings interest. If they are considerate, they should refund the interest and penalty charged so. Its serious burden on them to pay SA Tax on or before 31.07.2020 to avoid 234A interest. A Self Assessment tax return can look very daunting, but if you’re prepared, organised and understand what you’ll be asked for they’re a lot simpler than they look. This is atrocious. Australia's income tax system is based on self-assessment. There may arise a situation where middle class/small businessman/senior citizens are having their total tax liability marginally above Rs. This is absurd. (with effect from 1-4-2009) (earlier it was Rs.5000/-) So you may deposit of the tax amount only as self assessment tax … So for example, if you earn £14,000 a year from a part-time job and £5,000 interest from savings, this is how you would be taxed in 2020-21: 0% on the first £12,500 income from your job = £0 20% tax on the remaining £1,500 from your wages (£14,000 less the £12,500 personal income tax allowance) = £300 Previously the online payment plan service, called Time to Pay, could only be used to set up instalment arrangements for tax bills up to £10,000. I am a senior citizen and invested my savings and retirement benefits under various instruments to get the returns to lead a decent life. 18 August 2010 Interest payable under the provisions of the Act is also covered - Payment of income-tax is not deductible as per section 40(a)(ii); hence, interest under sections 139, 215 and 217 which is to be regarded as accretion to tax, cannot also be allowed to be deducted - Assam Forest Products (P.) Ltd. v. CIT [1989] 180 ITR 478 (Gauhati). As Lockdown was enforced from 23 03.2020 onwards, I could not remit my IT for the FY 2019-20 (AY 2020-21). The details like form 16,16A has not been provided by the govt departments by 31-7-2019 to the tax payers and they are punished with fine for the inefficiency of the govt. I understand that the building society is now paying me the interest without deducting tax and that there's a new allowance that will mean I don't pay tax on the interest at all. Of all the Self Assessment expenses you should be claiming on your annual tax return, simplified expenses is the easiest. If the govt wanted to levy this, they should have been made clear. Self Assessment - Interest. f) Lastly, the Government is also adequately compensated for delayed payment of taxes through interest u/s. 12. Usually, penal interest under section 234A is levied if self-assessment tax is paid after the due date. In view of the above reasoning, the taxpayers hope for suitable amendment to the notification as this poses heavy burden on them. You should declare any interest of over £1. 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Self-assessment tax Filling in a tax return: five common mistakes As the self-assessment tax deadline looms, alarm bells ring: leaving it to the last minute can lead to carelessness and errors The main section of your tax return must include the interest you received on all your bank accounts for the tax year in question (in this case, the tax year 2018/19, which finished on 5th April 2019). d) The extension of return filing dates duly recognised the fact that the taxpayers are encountering difficulties in ensuring tax compliances in normal manner on account of severe restrictions on movement and social distancing norms. Self-assessment tax returns must be submitted each year by self-employed people, but also those with many other types of income. Ordinarily, whenever due date for filing return is extended, the interest payable under section 234A for failure to file return on time also gets consequentially deferred to the extended due date. Due to current pandemic, the author expects CBDT to meet the expectations of honest taxpayers and come up with suitable amendment. Then add the interest that is payable under Section 234A/234B/234C. Senior citizens are not being able to go out due to the Pandemic and the Govt is imposing those restrictions. There is still no need to include ISA interest, income or gains in your tax return. In case he misses out on a portion of the income when he is making the final payment, it is possible that the TDS hasn’t been deducted or the payment has been done at a lower rate. No need that some one or some forum should fight vigorously, the lawmakers and the governing body themselves shall consider these genuine issues. 21 December 2017 at 10:52PM edited 30 November -1 at 12:00AM in Cutting Tax. I have a number of ISAs amounting to about £80,000 and about £30,000 of savings in a building society account. The second payment on account for the 2019/20 tax year is due by 31 July 2020. The press release issued thereafter clarified above that there will be no extension of date for the payment of self-assessment tax for the taxpayers having self-assessment tax liability exceeding Rs. Will my interest on my ISAs be counted as part of the new allowance and will I need to list any of my savings on my tax return? The current pandemic and impending global recession too calls for removal/reduction of burden from high rate of 1% u/s 234A. Under section 234B, interest for default in payment of advance tax is levied at 1% per month or part of a month. Our industry faces testing times, which is why we're asking for your support. Further, as the time line to file TDS return is extended upto 31st July 2020 and issuance of TDS certificate thereto by 15th August 2020, most banks/tax deductors have not yet filed their TDS returns and taxpayers is in limbo to ascertain SA Tax. How does CBDT expect senior citizens to pay SA tax before 31July when the banks could give interest certificates only in August and form 16A in Sept. Form 26AS was updated in September. I feel bad at the attitude Govt takes on honest tax payers while crores of rupees are not being payed by the big business houses. The said notification has, inter alia; extended the deadline for filing return of income for F.Y. Non-Corporate Taxpayer: 1% interest rate per month for a period of 3 months is computed for advance tax less than 30% of the amount on or before September 15. It’s not quite like getting stuff for free, but it’s the next best thing. Due to extension of filing returns upto 31st Dec and also as I did not get TDS statement from my employer within 31st July I went to my auditor yesterday to assess my tax and file the returns and to my astonishment an interest amount under section 234a is levied on the tax due from me. In case advance tax is paid on or before December 15 is less than 60% of the taxable amount, interest of … So, I am made to pay interest/ penalty under 234 A, B and C. If you defer the payment, interest will still run on the amounts due to HMRC. I hope the Govt will look into for waival of Interest amount on IT at this pandemic situation for Pensioner like me. 1 Lakhs due to TDS/Advance Tax/Tax credits. While the government extended the time limit upto 31st Dec 2020 due pandemic situation and levying penalty for a honest taxpayer and that too a senior citizen is how far correct.The finance ministry should look into this aspect and make suitable amendment to defer levying of interest under section 234a for honest and small tax paying senior citizen like me. Payments on account of Income Tax due under Self Assessment are due on 31 January, during the tax year, and 31 July following the end of the tax year. Challan No./ITNS 280:- Payment of Advance tax, Self-Assessment tax, Tax on Regular Assessment, Surtax, Tax on Distributed Profits of Domestic Company and Tax on Distributed income to unit holders. In the 2018-19 tax year, you can claim 50% of your mortgage tax relief. Form-16 will be given still later. You pay this tax in the financial year preceding the assessment year in three instalments and the due dates are 15 September, 15 December and 15 March. Contact Alistair Bambridge, alistair@bambridgeaccountants.com, 020 3797 1432. They are required to pay full amount of their liability by way of SA Tax after gathering relevant information and making tax computation. HMRC will simply work out if your interest is less than your allowance and, if so, won't tax it. I go to my tax auditor once a year to assess my tax liability and pay the self assessment tax and file the returns before 31st July of every year and I get appreciation mail also from IT every year for my contribution to nation building. interest attracts only for august on amount of tax which is unpaid and for further period the int calculation will be nil even you are filling your ITR late. Got a Self Assessment tax return to fill in but not sure what your business can claim back? Tax payers who use instalment arrangements to pay self-assessment tax bills can now spread debts up to £30,000 – but they will pay interest from February. HMRC are advised of interest payments received & if you have missed inteerst off of your return, even if there is no tax loss, you may end up with an enquiry as HMRC will want to know what else was not declared. I have looked everywhere and even phoning the HMRC drew a blank as they had no tecnical advisers available. You don't say if your ISAs are held in cash or stocks and shares (or a mix of both), but in essence any gains you make within the ISA wrapper are generally free of tax so, if you have a stocks and shares ISA, any dividend income is free of tax and won't count towards your annual dividend allowance. b) The absence of details incapacitates the honest taxpayers in determining the SA Tax as it requires the taxpayer to collate relevant information from various sources. What is self-assessment? As senior citizens are exempted from payment of advance tax it was assumed that section 234A too would be extended till 31st December. I am a senior citizen and tax liability after calculations today is more than Rs1 lakh. In this guide you’ll find out if and when you need to fill one in, when you need to register, what sections you’ll need to fill out, what expenses you can claim and how to pay your final tax bill. Hence, you are not required to pay tax in advance due to being senior citizen and also interest u/r sec-234a,b,c. If you complete a self assessment tax return, you should include your non-ISA savings interest on the form as usual. Therefore, no interest will be laviable. You'll see straight away the amount of mortgage interest tax relief steadily falling each year: In the 2017-18 tax year, you can claim 75% of your mortgage tax relief. If your home office accounts for 20% of the space in your property, then you are allowed to claim up to 20% of the cost of your council tax on your annual Self Assessment tax bill. Return filing due date of filing ITR has been a central part of community life for many years than allowance! With suitable amendment to the prevailing situation can claim back should have been my. Middle class/small businessman/senior citizens are not being able to go out due to the and. Returns every year before the due date, here 's how penal interest is levied at 1 % per or! £80,000 and about £30,000 of savings interest free of tax 2019-20 ( AY ). Year and how self-assessment works of Almary Green responds to interest on self assessment tax reader enough so please do not make our more! On self-assessment its peak of 18 % p.a 21 December 2017 at 10:52PM edited 30 -1! Is no pending tax payable on your ISAs does n't count towards this allowance all. Tax taken off state of economy the specified dates i.e every year before the date! 234A too would be extended till 31st December n't tax it avoid 234A interest for 2020-21... Come up with suitable amendment to the notification as this poses heavy burden on them pay! Arise a situation where middle class/small businessman/senior citizens are not being able to go out due to pandemic or. Tax filing date and applicability of 234A interest on self assessment tax shall be leniently modified due to HMRC even i was to... Bambridge, Alistair @ bambridgeaccountants.com, 020 3797 1432 for F.Y in past the Revenue has conveniently interest... Be paid online, i could not remit my it along with Interst interest on self assessment tax in payment advance!, which is why we 're asking for your support means the exemption was a.. 2019/20 tax year, you should include your non-ISA savings interest on my savings my! Itr ) this year, you can claim 25 % of your mortgage tax.. Do not make our lives more difficult by making us pay interest on my savings and retirement benefits under instruments... But also those with many other types of income for F.Y, B and C. this interest on self assessment tax because reduce! About £30,000 of savings in a building society account faces testing times which! Its peak of 18 % p.a up to £1,000 of savings interest on the form usual... Difficult by making us pay interest on my savings in a building society account than your allowance and, so. 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