ITR deadline extended to Sept 15: What it means for Self-Assessment Tax, penal interest
Tax Buddy clarifies that SAT is distinct from advance tax. While advance tax must be paid in installments during the financial year if the tax liability after TDS exceeds Rs 10,000, self-assessment tax is paid after the financial year ends but before filing the ITR.
- Sep 2, 2025,
- Updated Sep 2, 2025 1:54 PM IST
ITR filing 2025: The Income Tax Department has officially extended the Income Tax Return (ITR) filing deadline for the financial year 2024-25 to September 15, 2025, giving salaried individuals, pensioners, non-resident Indians (NRIs), and non-audit cases extra time to submit their returns. Previously, the deadline was set for July 31, 2025, creating confusion among taxpayers about whether the extension also applies to self-assessment tax (SAT) payments and the applicability of penal interest under Section 234A.
Understanding Self-Assessment Tax (SAT)
Self-Assessment Tax is the additional tax that a taxpayer owes after accounting for advance tax payments and TDS (Tax Deducted at Source) or TCS (Tax Collected at Source) for a particular financial year. Essentially, SAT is the difference between the total tax liability and the sum of taxes already paid during the year. Taxpayers are legally required to settle this tax before filing their income tax returns.
Tax Buddy clarifies that SAT is distinct from advance tax. While advance tax must be paid in installments during the financial year if the tax liability after TDS exceeds Rs 10,000, self-assessment tax is paid after the financial year ends but before filing the ITR. The timely payment of SAT ensures that taxpayers avoid penalties and interest charges.
Will you be penalised if SAT is paid after July 31?
A major point of confusion this year is whether taxpayers will incur penal interest under Section 234A if they pay SAT after the original July 31 deadline but before the extended September 15 date. The answer is reassuring: no penal interest is applicable, provided the SAT and ITR are completed by the extended deadline.
This extension and waiver of 234A interest are supported by legal precedents, including the Supreme Court ruling in the Prannoy Roy case, and CBDT Circular 2/2015, which confirm that late filing within the extended deadline does not attract interest under 234A.
Penal interest on Advance Tax
While the 234A interest waiver applies to SAT and ITR filing, advance tax obligations remain stringent. Section 234B requires taxpayers to pay interest if at least 90% of advance tax is not paid by the year-end. Similarly, Section 234C penalizes late or underpaid installments of advance tax.
For the financial year 2024-25, advance tax installments are due as follows:
15 June 2024 → 15% of total tax
15 September 2024 → 45% of total tax
15 December 2024 → 75% of total tax
15 March 2025 → 100% of total tax
Missed or underpaid installments incur interest at 1% per month until the dues are cleared.
Calculating Self-Assessment Tax
Taxpayers can calculate SAT using the following formula:
SAT=(A+B)−(C+D+E+F)
Where:
A = Total tax payable based on income from salary, business, capital gains, and other sources
B = Interest under Sections 234A/234B/234C
C = Tax relief under Sections 90/90A/91
D = MAT credit under Section 115JAA
E = TDS/TCS already paid
F = Advance tax already paid
Steps to calculate SAT
Aggregate income from all sources for the financial year.
Deduct eligible exemptions and deductions under Sections 80C, 80D, and others.
Compute total tax liability as per applicable slab rates.
Apply the formula above to determine the remaining self-assessment tax payable.
Key takeaways and deadlines
ITR Filing (FY 2024-25) → 15 September 2025
Self-Assessment Tax Payment → 15 September 2025 to avoid 234A interest
Advance Tax Installments → Due as per the schedule mentioned above; late payment attracts interest under Sections 234B/234C
With the extended deadline, taxpayers now have clarity and sufficient time to file returns and pay any remaining taxes without incurring additional interest. However, it is crucial to differentiate between advance tax and self-assessment tax to ensure compliance and avoid unnecessary penalties.
ITR filing 2025: The Income Tax Department has officially extended the Income Tax Return (ITR) filing deadline for the financial year 2024-25 to September 15, 2025, giving salaried individuals, pensioners, non-resident Indians (NRIs), and non-audit cases extra time to submit their returns. Previously, the deadline was set for July 31, 2025, creating confusion among taxpayers about whether the extension also applies to self-assessment tax (SAT) payments and the applicability of penal interest under Section 234A.
Understanding Self-Assessment Tax (SAT)
Self-Assessment Tax is the additional tax that a taxpayer owes after accounting for advance tax payments and TDS (Tax Deducted at Source) or TCS (Tax Collected at Source) for a particular financial year. Essentially, SAT is the difference between the total tax liability and the sum of taxes already paid during the year. Taxpayers are legally required to settle this tax before filing their income tax returns.
Tax Buddy clarifies that SAT is distinct from advance tax. While advance tax must be paid in installments during the financial year if the tax liability after TDS exceeds Rs 10,000, self-assessment tax is paid after the financial year ends but before filing the ITR. The timely payment of SAT ensures that taxpayers avoid penalties and interest charges.
Will you be penalised if SAT is paid after July 31?
A major point of confusion this year is whether taxpayers will incur penal interest under Section 234A if they pay SAT after the original July 31 deadline but before the extended September 15 date. The answer is reassuring: no penal interest is applicable, provided the SAT and ITR are completed by the extended deadline.
This extension and waiver of 234A interest are supported by legal precedents, including the Supreme Court ruling in the Prannoy Roy case, and CBDT Circular 2/2015, which confirm that late filing within the extended deadline does not attract interest under 234A.
Penal interest on Advance Tax
While the 234A interest waiver applies to SAT and ITR filing, advance tax obligations remain stringent. Section 234B requires taxpayers to pay interest if at least 90% of advance tax is not paid by the year-end. Similarly, Section 234C penalizes late or underpaid installments of advance tax.
For the financial year 2024-25, advance tax installments are due as follows:
15 June 2024 → 15% of total tax
15 September 2024 → 45% of total tax
15 December 2024 → 75% of total tax
15 March 2025 → 100% of total tax
Missed or underpaid installments incur interest at 1% per month until the dues are cleared.
Calculating Self-Assessment Tax
Taxpayers can calculate SAT using the following formula:
SAT=(A+B)−(C+D+E+F)
Where:
A = Total tax payable based on income from salary, business, capital gains, and other sources
B = Interest under Sections 234A/234B/234C
C = Tax relief under Sections 90/90A/91
D = MAT credit under Section 115JAA
E = TDS/TCS already paid
F = Advance tax already paid
Steps to calculate SAT
Aggregate income from all sources for the financial year.
Deduct eligible exemptions and deductions under Sections 80C, 80D, and others.
Compute total tax liability as per applicable slab rates.
Apply the formula above to determine the remaining self-assessment tax payable.
Key takeaways and deadlines
ITR Filing (FY 2024-25) → 15 September 2025
Self-Assessment Tax Payment → 15 September 2025 to avoid 234A interest
Advance Tax Installments → Due as per the schedule mentioned above; late payment attracts interest under Sections 234B/234C
With the extended deadline, taxpayers now have clarity and sufficient time to file returns and pay any remaining taxes without incurring additional interest. However, it is crucial to differentiate between advance tax and self-assessment tax to ensure compliance and avoid unnecessary penalties.