Got a Self Assessment tax return to fill in but not sure what your business can claim back? Copyright © TaxGuru. I feel bad at the attitude Govt takes on honest tax payers while crores of rupees are not being payed by the big business houses. Telephone: 0300 200 3822. The only exception to this would be a bank account on which the interest is paid tax-free, such as an ISA. Due to Pandemic. All Rights Reserved. Hence, you are not required to pay tax in advance due to being senior citizen and also interest u/r sec-234a,b,c. Therefore, no interest will be laviable. Refer the full guideline on Income tax website What is self-assessment? Of all the Self Assessment expenses you should be claiming on your annual tax return, simplified expenses is the easiest. For this, you need to … It’s not quite like getting stuff for free, but it’s the next best thing. 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. There may arise a situation where middle class/small businessman/senior citizens are having their total tax liability marginally above Rs. Carl Lamb, managing director of Almary Green. I have looked everywhere and even phoning the HMRC drew a blank as they had no tecnical advisers available. Then add the interest that is payable under Section 234A/234B/234C. b) The absence of details incapacitates the honest taxpayers in determining the SA Tax as it requires the taxpayer to collate relevant information from various sources. How does CBDT expect senior citizens to pay SA tax before 31July when the banks could give interest certificates only in August and form 16A in Sept. Form 26AS was updated in September. 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. In case advance tax is paid on or before December 15 is less than 60% of the taxable amount, interest of … Understanding what your allowable expenses are, as HMRC calls them, can really help your business. Required fields are marked *, Notice: It seems you have Javascript disabled in your Browser. The 1% interest is unacceptable. Form-16 will be given still later. Dear, 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. prevailing in 1990s to 6% p.a. Today I was shocked when I received the tax computation from my CA with interest for non payment of SA amount before 31July’20. 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. 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. You don't say if your ISAs are held in cash or stocks and shares (or a mix of both), but in essence any gains you make within the ISA wrapper are generally free of tax so, if you have a stocks and shares ISA, any dividend income is free of tax and won't count towards your annual dividend allowance. The Personal Savings Allowance gives basic rate taxpayers up to £1,000 of savings interest free of tax. In this state of affairs, the honest taxpayers as usual hope and recommend CBDT to review the above provisions of law & refrain from levying interest u/s 234A in AY 2020-21 and to come up with suitable amendment. 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As a senior citizen, I sincerely request CBDT to review this issue and provide relief as soon as possible as at present Senior Citizens are badliy hit by the Corona and they are not able to go out of home even for treatment. 18 August 2010 Interest payable under the provisions of the Act is also covered - Payment of income-tax is not deductible as per section 40(a)(ii); hence, interest under sections 139, 215 and 217 which is to be regarded as accretion to tax, cannot also be allowed to be deducted - Assam Forest Products (P.) Ltd. v. CIT [1989] 180 ITR 478 (Gauhati). You'll see straight away the amount of mortgage interest tax relief steadily falling each year: In the 2017-18 tax year, you can claim 75% of your mortgage tax relief. CA Deepraj Tomar In view of the above reasoning, the taxpayers hope for suitable amendment to the notification as this poses heavy burden on them. Our industry faces testing times, which is why we're asking for your support. This is because expenses reduce your Self Assessment tax bill. While the government extended the time limit upto 31st Dec 2020 due pandemic situation and levying penalty for a honest taxpayer and that too a senior citizen is how far correct.The finance ministry should look into this aspect and make suitable amendment to defer levying of interest under section 234a for honest and small tax paying senior citizen like me. So for example, if you earn £14,000 a year from a part-time job and £5,000 interest from savings, this is how you would be taxed in 2020-21: 0% on the first £12,500 income from your job = £0 20% tax on the remaining £1,500 from your wages (£14,000 less the £12,500 personal income tax allowance) = £300 In case he misses out on a portion of the income when he is making the final payment, it is possible that the TDS hasn’t been deducted or the payment has been done at a lower rate. Flat-rate simplified expenses. Due to current pandemic, the author expects CBDT to meet the expectations of honest taxpayers and come up with suitable amendment. Carl Lamb, managing director of Almary Green. The Finance Minister or the CBDT shall not remain a mute spectators towards the honest tax payers of this nation . Thanks, As a senior citizen, I sincerely request CBDT to review this issue and provide relief as soon as possible, Your email address will not be published. Even I was shocked to get an Interest liability of more than 20000 from my CA. If you complete a self assessment tax return, you should include your non-ISA savings interest on the form as usual. Interest is levied at one per cent per month or part of a month on a simple interest basis. The nature of interest is simple interest. This is atrocious. 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. Now i am caught in a bind. Further, as the time line to file TDS return is extended upto 31st July 2020 and issuance of TDS certificate thereto by 15th August 2020, most banks/tax deductors have not yet filed their TDS returns and taxpayers is in limbo to ascertain SA Tax. Australia's income tax system is based on self-assessment. Tax payers who use instalment arrangements to pay self-assessment tax bills can now spread debts up to £30,000 – but they will pay interest from February. As Lockdown was enforced from 23 03.2020 onwards, I could not remit my IT for the FY 2019-20 (AY 2020-21). Rate of interest. Greetings, However, the 2nd proviso to the said notification prohibits the normal operation of consequential impact of extension of return filing due date. - Credit: Archant. Further, several states like (TN,WB, MH) have extended lockdown till 31st July, 2020 because of outburst of COVID 19 pandemic. HMRC have announced that: The … 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. Usually, penal interest under section 234A is levied if self-assessment tax is paid after the due date. In the 2018-19 tax year, you can claim 50% of your mortgage tax relief. As per he CBDT’s Press Release dated 24.06.2020 if the Self Assessment Tax payable is more than Rs. Do I need to declare the interest on my savings in my tax return? 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. In order to submit a comment to this post, please write this code along with your comment: 6baf97130c2d5960755b99846e3b7c60. After ascerting that Self Assessment IT can be paid online, I have paid my IT along with Interst amount. Landlord mortgage interest tax relief from tax year 2017-2018 . It is atrocious for the govt to impose penalty under Sec234A when the last date for filing income tax returns has been extended. 1 Lakh the whole of the tax is to be paid by the specified dates i.e. Even after chasing for so many days in SBI/Baranagar Branch, I have been given only Form-16A only on 24.09.20. You should declare any interest of over £1. Will my interest on my ISAs be counted as part of the new allowance and will I need to list any of my savings on my tax return? Under this circumstance, how can CBDT impose an interest for not paying SA tax in time ? Self-assessment is the process of making your own assessment of your tax liability to Revenue. I have a number of ISAs amounting to about £80,000 and about £30,000 of savings in a building society account. Self-assessment tax returns must be submitted each year by self-employed people, but also those with many other types of income. Self-assessment tax is a type of tax that is paid by the taxpayer in relation to his or her income from other sources. Every contribution will help us continue to produce local journalism that makes a measurable difference to our community. I am a senior citizen and tax liability after calculations today is more than Rs1 lakh. The above said concern in respect of 234A interest shall be leniently modified due to the prevailing situation. As senior citizens are exempted from payment of advance tax it was assumed that section 234A too would be extended till 31st December. Usually, penal interest under section 234A is levied if self-assessment tax is paid after the due date of filing ITR. Before filing your income tax return (ITR) this year, ensure there is no pending tax payable on your part through self-assessment. In this case, the whole of the self-assessment tax shall be payable by the due dates specified in the Income-tax Act, 1961 (IT Act) and delayed payment would attract interest under section 234A of the IT Act”. We have gone through enough so please do not make our lives more difficult by making us pay interest on SA amount. The said recommendations are based on below rationale: a) The issuance of notification for extension in timelines/compliances itself is extraordinary due to the outbreak of Novel Corona Virus (COVID-19) and its declaration as pandemic by WHO. For FY 2019-20, the due date for filing ITR has been extended to November 30, 2020. This is absurd. No need that some one or some forum should fight vigorously, the lawmakers and the governing body themselves shall consider these genuine issues. Interest u/s 234A is most unjustified, more specially for the Senior citizens. Any update or representation given so far with the finance ministry on the same.. 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. I am a senior citizen and invested my savings and retirement benefits under various instruments to get the returns to lead a decent life. If the self-assessment tax is deposited after the due date, here's how penal interest is calculated. 21 December 2017 at 10:52PM edited 30 November -1 at 12:00AM in Cutting Tax. The press release issued thereafter clarified above that there will be no extension of date for the payment of self-assessment tax for the taxpayers having self-assessment tax liability exceeding Rs. Contact Alistair Bambridge, alistair@bambridgeaccountants.com, 020 3797 1432. Self Assessment Payment Helpline. I hope the Govt will look into for waival of Interest amount on IT at this pandemic situation for Pensioner like me. 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 section 234B, interest for default in payment of advance tax is levied at 1% per month or part of a month. It should be withdrawn forthwith giving a clear notification in the media. Non-Corporate Taxpayer: 1% interest rate per month for a period of 3 months is computed for advance tax less than 30% of the amount on or before September 15. If you defer the payment, interest will still run on the amounts due to HMRC. Monday to Friday, 8am to 4pm. Senior citizens are only required to pay tax in advance if they are having professional or business income. HMRC will simply work out if your interest is less than your allowance and, if so, won't tax it. If the govt wanted to levy this, they should have been made clear. 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. Interest is levied at one per cent per month or part of a month on simple interest basis. Int. SELF-EMPLOYED people will be required to pay interest from February if they choose to break down tax bills into instalments, which could be a blow for … Finishing your tax return TRG 13 Signing your form and sending it back TRG 14 A rough guide to your tax bill TRG 16 Tax return deadlines and penalties If you: • want to fill in a paper tax return, you must send it to us by 31 October 2020 (or 3 months after the date on your notice to complete a tax … 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. 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