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The trouble with missing ITR deadline under new tax regime

“The I-T division has taken away the advantage of decrease taxes through the new regime in returns filed belatedly in order to encourage taxpayers to file inside the deadline,” said Karan Batra, founder and CEO, Tax rates under the new regime are lower for incomes up to 15 lakh. 

Things will get complicated for those taxpayers who have paid their advance tax or asked their employer to calculate TDS liability as per the new tax regime as they are most likely looking at a higher tax liability now. “In such cases, it can result in changes in the tax liability, which taxpayers will have to adhere to,” mentioned Deepak Jain, chief govt,, a tax e-Filing and compliance administration portal.

Mint solutions among the key questions that this tax rule raises.

1. I opted for the new tax regime within the final evaluation 12 months. Do I nonetheless have to file belated ITR under the previous regime this 12 months?

It will fluctuate relying on whether or not you’re a salaried taxpayer or have earnings from enterprise or career. The former is required to pick out between the 2 regimes yearly whereas submitting their ITR.  Salaried people who opted for the new regime within the final evaluation 12 months and are submitting a belated returns this 12 months is not going to have the choice to proceed with the new regime this 12 months. They should file their tax returns under the previous regime. 

Rules are completely different for self-employed people. “Taxpayers who’ve earnings from enterprise or career have to decide on the regime solely as soon as and might proceed in the identical regime even when they file a belated return. Therefore, this rule impacts taxpayers with earnings from enterprise or career solely within the first 12 months, whereas different taxpayers get affected yearly,” said Prakash Hegde, a Bangalore-based chartered accountant.

2. On my request, my employer deducted tax at source as per the new tax regime. Can I get Form-16 changed?

While, technically, you can get your Form 16 revised, this request may face practical challenges. “It is unlikely that the employer would agree because there may be interest and late filing fees payable by the employer,” mentioned Neeraj Agarwala, Partner, Nangia Andersen India. 

Batra suggests utilizing earnings tax calculator accessible on the IT web site to calculate the new tax legal responsibility. “Alternatively, when the taxpayer fills in all the knowledge within the ITR, they’ll be proven the ultimate tax legal responsibility alongside with the relevant curiosity and costs,” he mentioned. 

3. I’ve paid advance tax as per tax legal responsibility calculated under the new regime. What ought to I do?

You have to calculate your tax legal responsibility once more as per the previous regime and pay extra tax, if any. Take observe that if extra tax legal responsibility arises, you’ll have to pay 1% curiosity under part 234C for delay in paying advance tax. 

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“This will kick in from the primary instalment of advance tax, i.e., 15 June, and is calculated in proportion to the tax due,” said Jain. 

This interest is over and above the 1% interest that taxpayers have to pay on outstanding tax under section 234A for defaulting on ITR filing within the due date. Effectively, if you have outstanding tax, you will pay 2% monthly interest on it post 31 July. 

4. I did not make any tax-saving investments as I had to opt for the new regime. Are there any tax breaks that I can now claim?

There are certain expenditures that qualify for tax deductions. Medical expenses up to 50,000 of uninsured parents aged 60 years and above and up to 5,000 spent on preventive health check-ups of self, spouse, children or parents can be claimed as deduction. Preventive health check-ups fall under the overall 25,000 ceiling of section 80D. 

Apart from these, stamp duty and registration fee on house purchase and children’s tuition fee (for both school and college) can be claimed under section 80C 1.5 lakh limit. Donation, too, qualifies for deduction under Section 80G.

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