You can file your Income Tax Return (ITR) even if you have tax dues but subject to some conditions. However, experts say that this option should be exercised only as a last resort.

Normal due date for filing ITR by salaried and Hindu Undivided Family (whose accounts need not to be audited) was July 31. Still, such an assessee can file ITR by/on December 31 but with a late fee between ₹1,000 and ₹5,000. Also, if there is tax due, there will be penal interest. Earlier, one could submit ITR, only when entire tax due is paid.

Now, e-filing portal gives an option “You can make the payment after filing your Income Tax Return.” This message will appear, only when one is filing the return and reached a stage, titled ‘tax payable.’ There one will get the option of paying later, but only in the case of self assessment. Also the option of pay later comes with two lines for caution: “You may be considered as Assessee in default and you may be liable to pay interest on tax payable.” Also, there will be advise stating: “It is recommended that you pay the amount now.”

‘Don’t defer’

“The option is available only to individuals and can be exercised only for deferring payment of self-assessment tax,” said Rahul Charkha, Partner with Economic Laws Practice

Divakar Vijayasarathy, Founder and CEO at DVS Advisors, says if the assessee has opted to file his return and pay taxes later, then the return would be treated as defective and the assessee would receive notice to rectify the same within 15 days. However, “in the event of the defect not being rectified within the given time, the return would become invalid and would be treated as if the assessee has not filed his return. All the related consequences of non filing of return would be applicable,” he said.

Adding to that, Charkha said that once a taxpayer is treated as an assessee in default, the income tax department can initiate all measures for recovery of such taxes. However, “the levy of penalty is not automatic,” he clarified,

Divakar suggests that even before the notice is sent, the assessee can revise his return by providing the details of the taxes paid. In the event of payment of taxes after filing of returns, there have been cases where assessees have argued that interest under Section 234A would be levied only till the date of filing of the original return and not the payment of taxes. However, the same could be challenged by the assessing officer. Hence, “assessees should prioritise payment of taxes on time before filing the return of income,” he said.

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