Ever Wondered Why Interest Accrues Even When the ITR Due Date Is Extended?

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Ever Wondered Why Interest Accrues Even When the ITR Due Date Is Extended?

Why Interest May Still Accrue—Even When the ITR Filing Due Date Is Extended

The Central Board of Direct Taxes (CBDT) has extended the due date for filing Income Tax Returns (ITR) for non-audit cases from 31st July 2025 to 15th September 2025 for Assessment Year 2025–26.

While this extension certainly provides relief in terms of compliance timelines, it does not imply a waiver of interest on unpaid taxes.

🚫 Extension of Return Filing ≠ Extension for Tax Payment

As per the Income-tax Act, taxes are required to be discharged within the financial year through TDS, advance tax, or self-assessment tax.

The extension provided by the CBDT is only for filing the return, not for deferring tax payments.

Therefore, interest liability under Sections 234A, 234B, and 234C continues to apply under specific circumstances, even if you file within the extended deadline.

📌 Interest Provisions – AY 2025–26

🔹 Section 234A – Delay in Filing ITR

  • Applicable only if the return is filed after the extended due date, i.e., after 15th September 2025.

  • Interest at 1% per month or part of the month is charged from 16th September until the date of filing.

✅ No interest under Section 234A if return is filed on or before 15th September 2025, irrespective of tax payable.

🔹 Section 234B – Short Payment of Advance Tax

  • If less than 90% of total tax liability was paid by 31st March 2025, interest under this section becomes applicable.

  • Interest is charged at 1% per month, starting from 1st April 2025 until the date of full tax payment.

Even if the return is filed within the extended deadline, 234B interest continues to accrue until the outstanding tax is fully paid.

🔹 Section 234C – Deferment of Advance Tax Installments

  • Interest applies if advance tax was not paid as per the prescribed installment schedule:

    • 15th June – 15%

    • 15th September – 45%

    • 15th December – 75%

    • 15th March – 100%

  • Calculated based on shortfall and timing of payment for each missed installment.

🧾 Key Takeaway

The extended deadline (15th September 2025) gives you more time to file your return, but not more time to pay your taxes.

Delaying tax payment — especially self-assessment tax — will result in interest accrual under Section 234B, even if the return is filed by the due date.
And if you miss the 15th September deadline, Section 234A interest will also kick in.

✔️ What Should You Do Now?

  • ✅ Compute your final tax liability well in advance

  • 💸 Pay any outstanding taxes immediately to reduce or stop further interest

  • 🗂️ File your ITR early to avoid last-minute errors or technical glitches

📞 Need Help? Let Eaztaxbiz Guide You

At Eaztaxbiz, we help individuals, professionals, and businesses manage their tax compliance efficiently.

Our services include:

  • 📊 Accurate tax computation

  • 🧮 Interest calculation under Sections 234A, 234B, and 234C

  • 📝 Timely and error-free filing of Income Tax Returns

📩 Visit us at: eaztaxbiz.blogspot.com
📧 Or reach out to our team today for professional support.

 In matters of tax, ignorance is never bliss.

🚀 Need assistance in financial planning, tax compliance, or business strategy? Connect with experts today!

 

Team Eaztaxbiz

Write us : ca@eaztaxbiz.com

Reach us : +91-9921010284

www.eaztaxbiz.com


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