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Simplifying Income Tax Return: Pay Later Option Explained
When filing your Income Tax Return (ITR), the Income Tax Department now offers a new convenience on the e-filing website—an option to pay later. This means an individual can submit their ITR without immediately making the payment of pending taxes. After submitting the ITR, the payment of the tax amount can be made later under certain conditions. Previously, ITR could only be filed once the outstanding tax dues were settled.
Embracing the “Pay Later” Approach
The “Pay Later” option provided by the Income Tax Department grants individuals the flexibility to file their ITR without settling the tax dues upfront. Wondering how to use the “Pay Later” option on the e-filing portal? Let’s delve into the details.
Considerations for Opting “Pay Later”
While the deferred payment option is advantageous, it’s crucial to note that it cannot be applied to certain tax liabilities such as TDS and other similar payments. When choosing the “Pay Later” option, a few factors need to be kept in mind. Once you select this option while submitting your ITR, the message “You may be considered as an assessee in default” will be displayed. Additionally, the notice will state “You may be liable to pay interest on tax payable.”
Strategies for Tax Settlement
If punitive interest is applicable on outstanding taxes, an individual could be declared a default tax payer. Once categorized as a default taxpayer, the Income Tax Department can initiate various measures to recover the due tax. According to helpline agents of the Income Tax Department, upon successful processing of the ITR, an individual will receive a notification. This notice will indicate the outstanding tax amount and request prompt payment. Subsequently, a 30-day window will be provided for tax settlement, during which no penal interest will be imposed. Should the payment be delayed beyond 30 days, punitive interest will be levied.
Differing Perspectives
However, opinions among tax experts differ regarding the one-month period. Some argue that the moment an individual opts for the deferred payment, they are immediately categorized as defaulting. Consequently, a 1% punitive interest will be imposed on the outstanding tax. If the payment is made more than 30 days after the due date, an additional 1% punitive interest will be charged. Therefore, when deciding whether to utilize this option, seeking advice from tax experts is advisable.
In conclusion, the “Pay Later” option introduced by the Income Tax Department adds convenience for individuals filing their ITR. While this deferred payment approach can be helpful, it’s essential to consider its implications and consult experts when needed.
