Due date to pay tax for Senior Citizens for FY 2019-20 as per Income Tax Notification 29 July 2020

As we all facing this pandemic our Income Tax department is trying to make things easy for our senior citizens. Due to the lockdown ministry of home affairs has issued guidelines for our senior citizen where they are advised to stay at home, unless it's an emergency like hospital visits.

Income Tax Department has extended due dates for Income Tax return filing and also paying taxes because of many states are still in lockdown and barely 10% staffs are working in professional offices and banks which makes difficult for senior citizens to comply the deadlines and due dates in Income Tax for payment of taxes and filing returns.

Normally, senior citizens are not required to pay any advance tax if their income comes from other that business activities like interest, dividend, pension, etc. They can pay tax at the time or before filing of Income Tax Returns for which every year the due date is 31 July.

This year due to COVID-19, Income tax department has extended many due dates including date to file Income Tax Returns and Revised Returns for last FY 2018-19 from 31st July to 30th September as per recent Notification No. dated 29 July, 2020.

Earlier Senior citizens were only liable to pay taxes at the time of filing Income Tax Returns. But due to the lockdown government is also facing scarcity of funds and thus in an utter need of funds. And thus, the government has decided to broadway their scope of collecting funds via enlarging the number of taxpayers.

Therefore, large taxpayers having liability of paying more than 1Lakh to pay Taxes by 31 July 2020, after that interest on tax will be applicable as per provision of Income Tax

Section 207 says,"a resident senior citizen (an individual of age 60 years or more) who does not have any income from business or profession is not liable to pay advance tax."

For example,a senior citizen may have various sources of income such as rental income, pension, interest from bank deposits, or dividends. She does not have to pay advance tax, as these sources of income do not fall under the income tax head of “income from business or profession”. Such an exemption is irrespective of the amount of income that a senior citizen earns from a source other than business or profession.

However in case the total self-assessment tax liability of senior citizen is more than Rs. 1,00,000 than the due date for paying self-assessment tax is on or before 31st July 2020 and not 30th November 2020.

What Income Tax Notification 29 July 2020 says for Senior Citizen?

The CBDT has issued following Notifcation

For Assessment Year 2020-21 Financial Year 2019-20, resident Senior citizen not required to pay advance tax under section 207, any self assessment tax paid by pre extended due date ( 31 July 2020 ) to be treated as advance tax. Thus after this payment if tax remaining to be paid is less than 1 lakh, no interest under 234A

Without this correction, senior citizen not required to pay advance tax and having self assessment tax of more than 1 Lakh would have had to file tax return by 31 July to avoid interest under section 234A

What is Interest for delay in filing of Income tax return (Section 234A):

Section 234A, is levied for delay in filing the return of income. Interest is levied at the rate of 1% per month or part of the month simple interest basis. In other words, the taxpayer is liable to pay simple interest at 1% per month or part of a month after 31st July 2020 in case the self-assessed tax liability is more than Rs. 1 lakh. Interest shall be calculated from the 1st August 2020 till the actual date of payment.

To correct above and to provide relief to Senior Citizen CBDT has issued Income Tax Notification 29 July 2020

To illustrate if Mr A is Senior Citizen covered under 207. Mr A have to pay tax of 3 lakh for FY 2019-20 and he pay 2.5 lakh by 31 July. Taking into account circular 2/2015 of 29 July 2020, Interest under section 234A would be levied on 50000. However now since Self Assessment Tax pending after his original due date (31July 2020) is less than one lakh no interest will be applicable as per 234A

Understand with more examples:

Taxpayer	Total tax liability (A)	Total TDS and Advance tax paid (B)	Self-assessment tax payable (A-B)	Self Assessment Paid Tax on	Income Tax Return Filed	Is Interest u/s 234A applicable
Senior citizen having income from interest pension etc	300,000	150,000	150,000	Rs 1,50,000 before 31 July 2020	On or before 30 November	No
Senior citizen having income from interest pension etc	300,000	150,000	150,000	Rs 51,000 before 31 July 2020 Balance Rs 99,000 before 30 Nov	On or before 30 November	No
Senior citizen having income from interest pension etc	300,000	150,000	150,000	Rs 49,000 before 31 July 2020 Balance Rs 1,01,000 on 30 Nov	30 November	Yes From 1 Aug to 30 Nov
Senior citizen having income from interest pension etc	300,000	150,000	150,000	Rs 49,000 before 31 July 2020 Balance Rs 1,01,000 before 31 Aug Nov	31 Aug	Yes For month of Aug
Senior citizen having income from interest pension etc	300,000	200,000	100,000	Rs 1,00,000 before 30 Nov	On or before 30 November	No
Senior citizen having income from interest pension etc	300,000	250,000	50,000	Rs 50,000 before 30 Nov	On or before 30 November	No
Senior citizen having income from interest pension etc	90,000	0	90,000	Rs 90,000 before 30 Nov	On or before 30 November	No

Note: The aformentioned Fees is exclusive of GST.