Linking ITR Filing and Section 140A: Filing Returns and Paying Taxes on Time to Avoid Penalties

Rajesh Kumar Kar
14 hours ago
10 min read

In 2025, ensuring that your Income Tax Return (ITR) is filed accurately and on time is crucial to avoiding penalties and staying compliant with tax laws. One significant provision in this process is Section 140A of the Income Tax Act, which mandates that taxpayers must pay any self-assessment tax due before submitting their ITR. Failing to comply with this requirement can lead to penalties, interest charges, and additional complications, making a relatively straightforward task much more challenging.

Section 140A serves as an important reminder that it's not enough to merely file your return. Before submitting, you must ensure that any tax liabilities due, which have not been covered by TDS or advance tax, are paid. This ensures that the Income Tax Department receives the full tax due and that your ITR is complete and compliant.

What is the Link between ITR Filing and Section 140A?

Understanding Section 140A and Its Relevance to ITR Filing

How Timely ITR Filing and Tax Payment Work Together

What Happens if I File My ITR Without Paying Self-Assessment Tax?

How TaxBuddy Facilitates Compliance with Section 140A and Timely ITR Filing

Conclusion

FAQs

What is the Link between ITR Filing and Section 140A?

Filing your Income Tax Return (ITR) on time, while ensuring that any self-assessment tax is paid before submission, is essential for avoiding penalties. Section 140A of the Income Tax Act requires that taxpayers pay the self-assessment tax owed before filing their return. Failure to do so may result in interest charges under Sections 234A, 234B, and 234C for any delays in payment.

Without the timely payment of self-assessment tax, your ITR could be rejected, and you may face further complications in the filing process. In addition to interest, you may be penalized for non-compliance, complicating what should be a straightforward filing process. Therefore, both the filing of your return and the payment of the self-assessment tax must be done promptly to ensure compliance with the tax laws and avoid any unnecessary financial burdens.

By paying the tax owed before filing, you ensure that your ITR is accurate, complete, and submitted on time, thus maintaining smooth tax compliance and avoiding penalties.

Understanding Section 140A and Its Relevance to ITR Filing

Section 140A of the Income Tax Act deals with the self-assessment tax process for taxpayers filing their Income Tax Returns (ITR). This section requires taxpayers to compute their tax liability and pay the due tax before submitting their ITR. The section aims to ensure that taxpayers settle their outstanding taxes promptly, even before their returns are processed by the Income Tax Department. Self-assessment tax includes any taxes that are owed after accounting for TDS (Tax Deducted at Source), advance tax payments, and other credits that may apply. Section 140A is highly relevant because failing to pay self-assessment tax when due can lead to penalties and interest charges, making timely payment crucial.

How Timely ITR Filing and Tax Payment Work Together

Filing your ITR on time and paying the appropriate taxes are closely linked processes. When you file your ITR, you must calculate your total tax liability, taking into account all sources of income and deductions. If the tax deducted at source (TDS) and advance taxes paid do not cover the full tax liability, the taxpayer is responsible for paying the remaining tax under self-assessment. This payment must be made before filing the ITR to avoid penalties and interest charges under Section 140A. Timely filing ensures that your tax calculations are accurate and that the necessary taxes are paid before the due date, which reduces the risk of facing penalties for late payment.

Tax Calculation and Payment

Tax calculation involves determining your total taxable income based on various income sources, deductions, and exemptions applicable for the relevant financial year. After calculating the tax, you must compare the total with the TDS already paid or advance tax paid. If the total taxes payable exceed these amounts, you are required to pay the difference as self-assessment tax.

Self-assessment tax is paid using the designated payment modes provided by the Income Tax Department, such as through online banking, debit/credit cards, or physical challans. Once paid, this tax should be mentioned in the ITR before submission. Filing ITR without paying the required self-assessment tax can lead to notices, penalties, and even prosecution under the Income Tax Act.

Filing ITR

Filing your ITR is a crucial task that involves submitting all the necessary details about your income, deductions, and taxes paid. In the case of Section 140A, it's important that the self-assessment tax is paid before submitting your return. Filing ITR involves filling out the correct forms for your category (individual, business, etc.), ensuring that all income sources are reported accurately, and claiming any eligible deductions. Once filed, the return is processed by the Income Tax Department, which may issue notices if discrepancies are found.

Avoiding Penalties

The penalty for not filing the ITR or not paying the necessary self-assessment tax can be severe. Penalties for late filing under Section 234F, for example, can range from ₹1,000 to ₹5,000, depending on the delay, and additional interest charges under Sections 234A, 234B, and 234C can accrue on the outstanding tax liability. By paying the self-assessment tax on time and submitting the ITR before the due date, you can avoid these penalties and interest charges.

Interest on Delay

Under Sections 234A, 234B, and 234C, interest is charged on the outstanding tax liability if there is a delay in filing the ITR or paying the due tax. The interest is calculated on a monthly basis and can add up quickly.

Section 234A: This section imposes interest for the delay in filing the return. The interest is 1% per month on the tax payable, starting from the due date of filing until the return is filed.
Section 234B: If there is any shortfall in the advance tax paid, interest is levied at 1% per month on the shortfall amount.
Section 234C: This section applies if the taxpayer has not paid enough advance tax by the required deadlines. The interest is calculated at 1% for each month of delay in paying the correct advance tax.

What Happens if I File My ITR Without Paying Self-Assessment Tax?

Filing your ITR without paying the required self-assessment tax is not compliant with Section 140A. The Income Tax Department may issue a notice (under Section 142(1) or Section 143(2)) asking you to pay the due tax. If you fail to pay the outstanding tax or rectify the error by submitting the correct payment, it can result in penalties, interest charges, and even further legal action. In such cases, the tax return will be considered incomplete, and your ITR will not be processed until the tax payment is made.

How TaxBuddy Facilitates Compliance with Section 140A and Timely ITR Filing

TaxBuddy simplifies the process of tax filing by ensuring compliance with Section 140A, which requires self-assessment tax payment before ITR submission. Here’s how TaxBuddy helps in making the process smoother:

Automated Tax Calculations

TaxBuddy automates the entire tax calculation process, including computing the self-assessment tax based on your reported income, deductions, and TDS. It ensures that the correct amount of self-assessment tax is calculated, helping you avoid errors in tax filing.

Easy Payment of Self-Assessment Tax

TaxBuddy integrates with various payment platforms, making it easy to pay your self-assessment tax directly through the platform. You can conveniently make payments online, and the system ensures that your tax payment is tracked and recorded properly.

Expert Assistance

If you’re unsure about tax calculations or the filing process, TaxBuddy offers expert assistance. Tax professionals can help you understand the complexities of your tax situation, ensuring that all tax liabilities are settled before you file your return.

Real-Time Refund Tracking and Notice Management

TaxBuddy tracks your refund status and provides updates on the progress of your return. In case you receive any notices from the Income Tax Department, the platform offers guidance on how to respond, helping you stay on top of any issues.

Mobile Convenience

With TaxBuddy’s mobile app, you can manage your taxes on the go. Whether it’s paying self-assessment tax, filing your ITR, or tracking your refund status, the mobile app provides all the tools you need at your fingertips.

Conclusion

Section 140A is an essential provision for ensuring that taxpayers pay their self-assessment tax before filing their ITR, helping to avoid penalties and interest for late payments. Timely filing and correct tax payments are critical for staying compliant with the Income Tax Act. TaxBuddy’s user-friendly platform takes the guesswork out of the process, providing automated tax calculations, seamless self-assessment tax payment options, and expert support to help you navigate the complexities of ITR filing. By leveraging TaxBuddy’s tools, you can easily ensure that your taxes are filed correctly and on time, avoiding unnecessary penalties and complications.

FAQ

Q1. What is the time limit to respond to a notice under Section 142(1)?

The time limit to respond to a Section 142(1) notice is typically mentioned in the notice itself. In general, taxpayers are expected to respond within 15 to 30 days from the date of the notice, depending on the specifics of the case. If you fail to respond within the given time frame, the Income Tax Department may proceed with an ex parte assessment, which could result in a higher tax liability. It’s crucial to act promptly and respond with all the required information to avoid penalties.

Q2. Can I file a revised return after receiving a Section 142(1) notice?

Yes, you can file a revised return under Section 139(5) after receiving a Section 142(1) notice, especially if the notice was issued due to errors in the initially filed return. The revised return should be filed before the completion of the assessment. The process involves selecting the "Revised Return" option while filing your ITR and providing accurate data. It is also crucial to ensure that the revised return is e-verified to complete the process.

Q3. Is it mandatory to appear in person for the scrutiny hearing?

No, it is not mandatory to appear in person for the scrutiny hearing. Section 142(1) notices typically ask for additional information or clarification and do not always require physical appearances. You can submit your response and necessary documents online via the Income Tax Department’s e-filing portal. However, if required, you may need to attend hearings or provide further clarifications based on the nature of the notice.

Q4. What happens if I miss the response deadline?

If you miss the deadline to respond to a Section 142(1) notice, the Income Tax Department may proceed with an ex parte assessment, which means your return could be processed based on the available data, and any errors or missing information could result in a higher tax demand. Missing the deadline can also lead to penalties, additional taxes, and legal consequences. It’s important to respond within the time frame to avoid these issues.

Q5. How can TaxBuddy help in responding to Section 142(1) notices?

TaxBuddy provides expert assistance in handling Section 142(1) notices by guiding you through the process of filing a revised return and responding to queries from the Income Tax Department. The platform allows you to easily upload and manage documents, communicate with tax experts, and ensure compliance. With TaxBuddy’s AI-driven tools, you can efficiently resolve any discrepancies in your tax filings and avoid penalties.

Q6. Can I respond to the notice online without visiting the office?

Yes, you can respond to a Section 142(1) notice online through the Income Tax Department’s e-filing portal. The portal allows taxpayers to submit required documents, fill out additional forms, and respond to the notice without having to visit the Income Tax office. You can also upload scanned copies of any supporting documents and track the progress of your response online.

Q7. What documents should I submit to support my claims?

The documents you need to submit depend on the specific information requested in the Section 142(1) notice. Common documents include TDS certificates (Form 16), proof of income (bank statements, salary slips), investment proof for deductions under Sections 80C, 80D, etc., and any other documents related to the discrepancies identified by the Income Tax Department. It’s important to review the notice carefully and provide accurate documentation to support your claims.

Q8. Can a tax consultant or CA represent me in responding to the notice?

Yes, a tax consultant or Chartered Accountant (CA) can represent you in responding to a Section 142(1) notice. They can help you gather the necessary documents, file a revised return if needed, and communicate with the Income Tax Department on your behalf. They can also provide expert advice on how to resolve any discrepancies and ensure compliance with tax laws. You can authorize your CA or tax consultant to act on your behalf through the Income Tax portal.

Q9. How long does the scrutiny process take after responding to the notice?

The scrutiny process after responding to a Section 142(1) notice typically takes a few weeks to a few months, depending on the complexity of the case and the volume of pending assessments with the Income Tax Department. The department may require additional information or clarification, which can extend the timeline. Once the response is reviewed, the department will issue an order, which may involve either a refund or an additional tax demand.

Q10. What if I disagree with the assessing officer's findings?

If you disagree with the findings of the assessing officer, you have the right to appeal. The Income Tax Act provides an appeal process to challenge the assessment order. You can file an appeal before the Commissioner of Income Tax (Appeals) within 30 days from the date of receiving the assessment order. It's advisable to consult a tax professional or CA to guide you through the appeal process and present your case effectively.

Q11. What happens if the assessment is completed without my response?

If the assessment is completed without your response to a Section 142(1) notice, the Income Tax Department will process your return based on the available information. This may result in a higher tax demand, as any discrepancies or missing information could lead to incorrect assessments. Additionally, failure to respond to notices can lead to penalties, interest on unpaid taxes, and other legal consequences. It’s crucial to respond promptly to avoid such outcomes.

Q12. Can I request an extension to respond to the notice?

In certain cases, you can request an extension to respond to a Section 142(1) notice. While the Income Tax Department does not generally grant extensions, they may allow more time if you can provide valid reasons for the delay, such as health issues or other significant circumstances. You can submit a formal request for an extension through the Income Tax portal or directly to the assessing officer. However, it’s always better to respond within the original time frame to avoid complications.