Income Tax Return for FY21: Extra Fee to be Refunded. Do This to Avoid it for e-Filing ITR

Any excess amount or late fee charged by the new Income Tax portal for filing income tax return (ITR) for the financial year 2020-21 will be refunded, the tax department has recently said. In the view of Covid-19 pandemic and the challenges faced by the common taxpayers, the Income Tax department has earlier extended the deadline for filing ITR to September 30 from July 31. However, many taxpayers complained that they were charged excess interest and late fee for filing ITR after July 31, earlier deadline of filing returns for the year 2020-21.

Considering the hassle faced by the taxpayers, Income Tax department has rectified the glitch in the ITR software used for filing income tax return. In a tweet, the tax department said, “The ITR software was rectified on 1st August, 2021 itself to remove the error due to incorrect computation of interest u/s 234A and late fee u/s 234F.” The department also requested the taxpayers to use the latest version of the ITR software to file income tax applications.

The tax department further assured that if anyone has submitted income tax return with incorrect interest or late fee, the amount will be refunded to them. “If, by any chance, someone has already submitted the ITR with such incorrect interest or late fee, the same will be correctly calculated while processing at CPC-ITR and the excess amount paid, if any, will be refunded in the normal course,” the income tax department said in a tweet.

“If ITR is filed beyond due date, there are two major financial consequences.

As per section 234A , there would be interest for delay in filing of ITR. According to section 234F, if ITR is not filed before due date, taxpayer has to pay penalty which can be up to ₹10,000. This year due date for filing for Individuals has been extended from July 31 to September 30,” said Sujit Bangar Founder

“Earlier, many taxpayers found wrong calculation of interest u/s 234A and penalty u/s 234F while filing ITR. Many taxpayers have unknowing did end up in paying this excess interest or penalty. Recent, clarification by CBDT is big relief to these taxpayers. The wrongly calculated interest and penalty would be refunded to taxpayers in due course. This refund would be received after processing of ITR already filed,” he added.

“The due date of filing ITR for FY2020-21 (AY 2021-22) is 30th September 2021 (extended from 31st July). Therefore, late filing fees and interest u/s 234A up to a certain extent shall be applicable only after the due date which is 30th September 2021. However, due to a technical glitch on the Income-tax portal, late filing fees & excess interest were levied in few cases filed after 31st July which is incorrect, so the department will issue a refund of late fees & excess interest paid by the taxpayers,” said Abhishek Soni, co-founder and CEO,

The tax department has launched a new income-tax e-filing portal in June. The aim was to make your income tax return (ITR) filing journey more convenient and hassle-free. From pre-filled income tax return forms to quick refunds — the new portal has tons of new features to provide a “modern and seamless experience to taxpayers”. Soon after its launch, many taxpayers took social media sites to complain against the tech glitches on the new platform. Several stakeholders have submitted written inputs highlighting the issues facing the portal as well as areas that need to be fixed. The Income Tax department has already taken corrective measures based on feedback from taxpayers and professionals. The tax department will also introduce an mobile application for ITR soon.