Many taxpayers were relieved when the government extended the deadline to file income tax returns (ITRs) for the fiscal year 2024-25 (AY 25-26) to September 15, 2025, up from July 31, 2025. The deadline was extended for taxpayers whose accounts do not need to be audited. These would include salaried individuals, non-resident Indians, and pensioners.
Has the deadline for paying self-assessment tax without penalty been extended for these taxpayers? Here's what the experts say.
Is penal interest applicable if self-assessment tax is paid after July 31, 2025?
Tarun Garg, Director, Deloitte India, told that interest under Section 234A of the Income Tax Act, 1961, applies when the ITR is filed after the due date specified in Section 139(1) and the self-assessment tax is unpaid as of that date.
Garg stated that with the ITR filing due date for FY 2024-25 (AY 2025-26) extended to September 15, 2025, the revised date will be considered the 'due date' under Section 234A.
"Accordingly, interest under Section 234A of the Act will not be levied if the due amount of tax is paid on or before the extended deadline of September 15, 2025. This position is supported by the Supreme Court's decision in CIT vs. Prannoy Roy [309 ITR 231 (2009)] and CBDT Circular No. 2/2015, which upheld the Court's decision," Garg stated.
Tarun Kumar Madaan, a practicing Chartered Accountant, told, "In the present case, since the due date under Section 139(1) has been extended to September 15, 2025, interest under Section 234A should not be applicable if the ITR is filed and the entire self-assessment tax is paid on or before this extended date. In several previous cases where the due date for filing the return was extended, the CBDT explicitly stated that the extension would not apply for the purposes of Section 234A, and interest would be computed from the original due date."
"However, Circular No. 6/2025 does not include such a caveat. Given that the extension was granted for reasons beyond the taxpayer's control (such as the non-availability of return filing utilities), it is reasonable to conclude that no interest under Section 234A should be charged if the return is filed by September 15, 2025."
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According to Shubham Jain, Associate Director at Nangia Andersen India, the CBDT circular announcing the due date extension specifies that the due date, as provided under Section 139(1), has been extended from July 31, 2025, to September 15, 2025.
He stated that interest under Section 234A should not be levied in cases where the ITR is filed after July 31 but before September 15, 2025.
What is the self-assessment tax?
It is the amount of income tax that a taxpayer must pay after deducting Tax Deducted at Source (TDS), Tax Collected at Source (TCS), and advance tax payments from his or her total tax liability for the applicable fiscal year.
According to Section 234A, if a taxpayer files a belated ITR (i.e., after the due date) and pays the self-assessment tax later, the taxpayer must pay penal interest on the self-assessment tax due.
Will penal interest be charged on advance taxes?
For FY 2024-25 (AY 2025-26), taxpayers will be required to pay penal interest for failure to pay or underpayment of advance tax payments. Section 234B applies if a taxpayer has not paid the advance tax in full by the due date. Section 234C imposes penal interest if the taxpayer pays less than the prescribed advance amount.
