Penalty for Late Filing of Income Tax Return

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Filing the ITR within the due date is very important. By doing so, taxpayers can evade penalties and other consequences due to not filing or missing an ITR. Filing the ITR online is a quick process that takes only a few minutes. However, evading the process or missing out on the ITR filing process can cause unnecessary repercussions. 

In this post, we will discuss the repercussions of missing the ITR filing due date and the penalty for late filing.

What is the ITR Due date for the Assessment Year (AY) 2024-25?

According to section 139(1), the income tax return (ITR) due date for AY 2024-25 is 31 July 2024. The date may change if the government sends a notification about extending it. Taxpayers must file their ITR before the due date because missing the filing date can result in legal consequences.  

Not only does late ITR filing impose a late fee, but it also has many other implications, as discussed in the post ahead. The table below mentions the important dates regarding income tax return filing last date that you may note:

Particulars 

IT Return Filing date

ITR filing date for entities and individuals who are not liable for tax audits

31st July 2024
ITR filing date for taxpayers who come under tax audits 

31st Oct 2024

ITR filing date for taxpayers who come under transfer pricing

30th Nov 2024
Due date for belated/ revised return for FY 2023-24

31st Dec 2024

Fees Charged for Late Filing of ITR

As per Section 234F, a late fee is charged for filing an ITR after the due date. The last date for filing income tax returns is 31 July 2024, so anyone filing returns after that date will have to pay a late fee to file a belated return by December 31, 2024.

INR 5,000 is the penalty levied as the maximum late fee charged for filing ITR after the income tax return last date, 31 July 2024, and before 31 December 2024, which is the last date of filing belated returns. 

However, the government allows certain relief, especially for small taxpayers. Thus, if the total income of small taxpayers does not go beyond INR 5 lakh, INR 1000 is levied as the maximum penalty for the delay. 

Late Filing Fee as Per Section 234F  

Due date of filing return

Late fee on income below INR 5 lakh

Late fee on income above INR 5 lakh

Up to 31st July 2024

INR 0 INR 0
Between 1st August 2024 to 31st December 2024 INR 1,000

INR 5,000

What Happens if you Miss the Deadline?

Missing the deadline for filing an ITR can impose penalties and have varying consequences. However, taxpayers can avoid filing an ITR under Section 139 of the Income Tax Act in case they have a financial crisis. In this case, they will not be subjected to a late fee under Section 234. 

On the other hand, taxpayers who are obliged to file an ITR and fail to file it on time before the deadline may incur a penalty of INR 5,000 under Section 234F. This amount is lowered to INR 1000 if the income of the individual is less than INR 5 lakh.

However, you may note that if you miss the ITR filing deadline, you can still submit a belated return before December 31, 2024. In this case, the taxpayer must pay the late fee as mentioned above, depending on the category they fall in.   

Further, sub-section (8A) under Section 139 allows taxpayers to file an updated return in case they miss the due date of the belated return. In this case, they can file it within 24 months from the end of the AY. However, some conditions need to be taken into account for the same.  

Financial Implications of Not Filing Income Tax Returns on Time

It is good to file an ITR on time within the due date. Although there are options for submitting ITR late, you must note that late filing will incur penalties and consequences as mentioned below:

1. Prosecution:

Not filing ITR on time or evading taxes can get a taxpayer to pay penalties of up to 50% in case of underreporting of income and up to 200% in case of misreporting of income. The taxpayer may also face imprisonment for a term of three months to two years, along with the fine. This prosecution may extend to up to seven years in case the taxpayer owes higher tax amounts to the IT department.

2. Penalty:

As discussed above, taxpayers may attract an ITR late filing penalty of INR 5000 for individuals with a total income beyond INR 5 lakh and INR 1000 for individuals with an income below INR 5 lakh. So, if you file an ITR after December 31, 2024, you will have to pay a penalty of INR 10,000.

3. Interest for Late Filing:

In case there are taxes due on the taxpayer, and they fail to file the return by the due date, it will attract the added interest of 1% per month until the return is filed. 

4. Delayed Refunds:

Late filing of ITR has another drawback, as it can delay tax refunds (in case applicable), which may cause financial stress. The late filing further attracts the attention of tax authorities towards taxpayers who try to evade tax and may cause extra audits and inquiries.

5. Unable to set off losses:

Late filing also limits taxpayers from losses as they cannot carry forward certain losses, which are otherwise available for carry forward to future years. 

6. Benefits Under the New Tax Regime will not apply:

Further, salaried employees also cannot choose the new tax regime if the ITR is not filed on time. Further, even if the taxpayer opts for the new regime with the employer, it will result in the payment of added tax and interest.

How to Apply for Condonation of Delay if ITR for Previous FY is not Filed?

If taxpayers couldn’t file ITR for earlier financial years, they can seek condonation of delay to file an online return. So, if you couldn’t file or missed the ITR filing date for the previous FY 2022-23 by 31st December 2023, you can use an e-filing portal to request a condonation of delay and file an online return. Check the steps below to file ITR for previous financial years.

Steps for Filing ITR for Previous Year Through Online Mode

Here are the steps to follow to file ITR online by Placing a Condonation of Delay:

  1. In the first step, get into your e-filing account
  2. Under the ‘Services’ tab, go to ‘Condonation Request’ and click on it
  3. Go to the ‘Allow ITR filing after time-barred’ option and press ‘Continue’ 
  4. Next, press on the ‘Create Condonation Request’ option 
  5. Submit the required details, upload the return, and press the ‘submit’ button
  6. Once your submission is done successfully, you can get it verified by selecting the ‘e-verify’ option. Depending on the condonation request approval, your ITR will be processed. 

In case of any technical issue, taxpayers can raise a complaint online or by visiting the concerned Assessing Officer with an application stating that they condone the delay. Once the issue is resolved, they can continue with the online ITR filing.

Steps for Filing ITR for the Previous Year Through Offline Mode

Generally, offline filing of ITR is not accepted as a proper mode for return submission. Only in certain cases is paper mode of ITR filing accepted. For instance, 

  • If the taxpayer filing the return is above 80 years, the paper mode is accepted  
  • Also, if the locality of residence of the taxpayer lacks an online facility, thereby affecting e-filing, the taxpayer can file paper returns

Other Penalties for Missing the ITR Filing Due Date

One should remember that the repercussions of late ITR filing may go beyond penalties. The official portal of the Income Tax Department states that non-payment of taxes will have severe penalties on the tax evader in terms of accrued interest and legal action. 

You should know that evading taxes may result in imprisonment of three months to up to two years. Further, if the amount of tax evaded exceeds INR 25,00,000, the evader can be put behind bars for over seven years.

What are the Benefits of Filing a Timely ITR?

It is the responsibility of every taxpayer to file for ITR on time. Further, there are several benefits of doing so, as discussed below:

1. Helps in getting loans approved easily:

Filing timely ITR helps people get easy approval of loans when they apply for a vehicle, house, personal loan, etc.

2. ITR can be used as proof of income and address:

The taxpayer can use ITR as proof of their address and income, which can be utilized while applying for a visa or loan, etc.

3. Visa Processing is done smoothly:

Generally, embassies and consulates ask for copies of the ITR of the past years of the person applying for a visa. 

4. Helps in the carry forward of losses:

Filing tax returns within the due date helps the taxpayer carry forward losses to the following years, which can be used to offset against what you earn in the future. 

5. It helps avoid penalty and prosecution:

By paying tax on time, taxpayers can avoid prosecution proceedings by the income tax department.

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To Sum Up

As discussed above, there are several unfavorable outcomes and consequences of not filing an ITR on time. If you face any tax situation, you can seek professional help from tax experts rather than paying penalties and interest.  

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Mar 08, 2024
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