Hence, you are not required to pay tax in advance due to being senior citizen and also interest u/r sec-234a,b,c. 1 Lakhs due to TDS/Advance Tax/Tax credits. Therefore, no interest will be laviable. Even I was shocked to get an Interest liability of more than 20000 from my CA. 234B for which there is no relaxation. The current pandemic and impending global recession too calls for removal/reduction of burden from high rate of 1% u/s 234A. This means that information you provide to the ATO is initially accepted as being true and correct when you lodge your tax return and other forms on which you disclose your tax liability. HMRC have announced that: The … Interest is levied at one per cent per month or part of a month on simple interest basis. I normally don't include my ISA interest in my tax return and up to now any tax due on my building society savings has been deducted before I get the interest, although the amounts did need to be included on my tax return. Under section 234B, interest for default in payment of advance tax is levied at 1% per month or part of a month. All Rights Reserved. As Lockdown was enforced from 23 03.2020 onwards, I could not remit my IT for the FY 2019-20 (AY 2020-21). I am a senior citizen and tax liability after calculations today is more than Rs1 lakh. This is a nice way of showing your appreciation for seniors to obey government instructions and stay at home and then make honest citizens pay penalty under Section 234A. First the government and our honorable prime minister asks all citizens and more so the senior citizens to avoid going out of the house to avoid contacting the corona virus and then expects us to pay SA tax before 31July failing which the CBDT slaps a penalty of 1% of the tax due. In view of the challenges faced by taxpayers in meeting the statutory and regulatory compliance requirements due to the outbreak of Novel Corona Virus (COVID-19), the Government has issued Notification dated 24th June 2020 under the Ordinance for extension in the time limits for making various compliances falling due between 20th March 2020 to 31st December 2020. It should be withdrawn forthwith giving a clear notification in the media. In the 2018-19 tax year, you can claim 50% of your mortgage tax relief. Then add the interest that is payable under Section 234A/234B/234C. 1 lakhs and are normally paying full tax liability through SA tax in the absence of any TDS/Advance Tax vis a vis HNIs, Large corporates, etc.. having total tax liability in crores and resulting SA liability not exceeding Rs. Its serious burden on them to pay SA Tax on or before 31.07.2020 to avoid 234A interest. Further, in past the revenue has conveniently reduce interest rate for refund u/s 244A from its peak of 18% p.a. Importantly, the interest you get on your ISAs doesn't count towards this allowance as they are already free of tax. Higher rate taxpayers get an allowance of £500, but additional rate taxpayers don't get this allowance at all. What is self-assessment? Ordinarily, whenever due date for filing return is extended, the interest payable under section 234A for failure to file return on time also gets consequentially deferred to the extended due date. Now i am caught in a bind. I understand that the building society is now paying me the interest without deducting tax and that there's a new allowance that will mean I don't pay tax on the interest at all. In other words, the taxpayer is liable to pay simple interest at 1% per month or part of a month for default in payment of advance tax. This is a burden for senior citizens who are not required to pay Advance tax and had to wait till Aug 15 to get their Form 26 AS. Interest u/s 234A is most unjustified, more specially for the Senior citizens. 1 Lakh the whole of the tax is to be paid by the specified dates i.e. The said notification has, inter alia; extended the deadline for filing return of income for F.Y. A Self Assessment tax return can look very daunting, but if you’re prepared, organised and understand what you’ll be asked for they’re a lot simpler than they look. If the govt wanted to levy this, they should have been made clear. This new allowance – which first applies to the 2016/17 tax year – means that the vast majority of savers won't pay tax on their savings interest. c) Taxpayers greater than 60 years i.e. In order to submit a comment to this post, please write this code along with your comment: 6baf97130c2d5960755b99846e3b7c60. Rising coronavirus rates mean Norfolk 'highly likely' to go into Tier 3 or 4, Droves of pubs and restaurants shutting down until tier two is over, Warning against Christmas visits to north Norfolk as virus cases surge, William and Kate 'inadvertently' breach rule of six at Sandringham event, Coastal hotel shuts following Tier 4 annoucement, Two people and a dog killed in crash on the Acle Straight, First glimpse of new Alan Partridge series revealed, Fish and chip shop at pub closes after positive coronavirus case. If your home office accounts for 20% of the space in your property, then you are allowed to claim up to 20% of the cost of your council tax on your annual Self Assessment tax bill. Carl Lamb of Almary Green responds to our reader. 12. So, I am made to pay interest/ penalty under 234 A, B and C. This is atrocious. Every contribution will help us continue to produce local journalism that makes a measurable difference to our community. In the 2019-20 tax year, you can claim 25% of your mortgage tax relief. In this guide you’ll find out if and when you need to fill one in, when you need to register, what sections you’ll need to fill out, what expenses you can claim and how to pay your final tax bill. Of all the Self Assessment expenses you should be claiming on your annual tax return, simplified expenses is the easiest. Dear, in the case of non-audit cases on or before 31 st July and in the case of audit cases on or before 30 th September and if paid beyond the said dates they have to bear interest under section 234A @ 1% per month or part thereof. Find out who has to complete a tax return for the 2019-20 tax year and how self-assessment works. As per he CBDT’s Press Release dated 24.06.2020 if the Self Assessment Tax payable is more than Rs. Thanks for any help. The main section of your tax return must include the interest you received on all your bank accounts for the tax year in question (in this case, the tax year 2018/19, which finished on 5th April 2019). Rate of interest. However, the 2nd proviso to the said notification prohibits the normal operation of consequential impact of extension of return filing due date. I have a number of ISAs amounting to about £80,000 and about £30,000 of savings in a building society account. The imposition of the 1% additional interest on deferred amount means the exemption was a sham. Flat-rate simplified expenses. I am a senior citizen and invested my savings and retirement benefits under various instruments to get the returns to lead a decent life. Whether there is any likelihood of any notification for withdrawal of interest under 234A for delay in filing of return even if all due tax has been paid in Aug 2020. You just enter the details of the 8% interest part of the PPI refund on your tax return as “savings interest” and put in how much tax was deducted from this. 21 December 2017 at 10:52PM edited 30 November -1 at 12:00AM in Cutting Tax. They are required to pay full amount of their liability by way of SA Tax after gathering relevant information and making tax computation. HMRC will simply work out if … Advance tax: You need to pay advance tax if you are a salaried taxpayer with other sources of income like interest on deposits and your tax liability for the year exceeds Rs 10,000 after your employer has deducted the TDS. Telephone: 0300 200 3822. e) Also there seems no rationale for dividing tax payers having SA tax liability below or exceeding one lakh. d) The extension of return filing dates duly recognised the fact that the taxpayers are encountering difficulties in ensuring tax compliances in normal manner on account of severe restrictions on movement and social distancing norms. Under this circumstance, how can CBDT impose an interest for not paying SA tax in time ? Today I was shocked when I received the tax computation from my CA with interest for non payment of SA amount before 31July’20. Contact Alistair Bambridge, alistair@bambridgeaccountants.com, 020 3797 1432. I also have income from a rental property on top of my personal pension which I get every month so do a tax return each year. interest attracts only for august on amount of tax which is unpaid and for further period the int calculation will be nil even you are filling your ITR late. Dear sir, Carl Lamb, managing director of Almary Green. If you defer the payment, interest will still run on the amounts due to HMRC. The nature of interest is simple interest. It’s not quite like getting stuff for free, but it’s the next best thing. The following procedure can be followed for the computation of self assessment tax: First calculate taxable amount payable on the individual’s total income with the help of the income tax slabs available online. If you complete a self assessment tax return, you should include your non-ISA savings interest on the form as usual. While it’s easy to see self-assessment in a negative light, the self-assessment process can actually give you greater control over your taxes and empower you to better manage your business-related finances. Landlord mortgage interest tax relief from tax year 2017-2018 . This is absurd. Before filing your income tax return (ITR) this year, ensure there is no pending tax payable on your part through self-assessment. Self-assessment tax Filling in a tax return: five common mistakes As the self-assessment tax deadline looms, alarm bells ring: leaving it to the last minute can lead to carelessness and errors CA Deepraj Tomar Section 234A Interest for AY 2020-21: Taxpayer’s hopes are normal as usual but results are opposite as expected. Even after chasing for so many days in SBI/Baranagar Branch, I have been given only Form-16A only on 24.09.20. Got a Self Assessment tax return to fill in but not sure what your business can claim back? Thanks. A client has received ppi compensation along with the interest and tax taken off. Carl Lamb, managing director of Almary Green. Equally any profit made from buying and selling investment assets held in your ISA will also generally be free of capital gains tax while they're in the ISA wrapper and won't count towards your annual CGT allowance. 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