Penalties for Late Income Tax Return Filing in India

Individuals with income exceeding more than the basic exemption limit are required to file an Income Tax return within the due date and if the person fails or misses the due date then there are certain provisions of penalty under the Income Tax Act, of 1961. The assessing officer may contact the individual through a notice to furnish reasons for not filing the return within the due date. Not filing the return within the due date may lead to a levy of penalties up to INR 5,000.

It was a well-known fact that the last date to file your ITR for the Financial Year is 31st July 2024 (Non-audit) and 31st Oct 2024 (Audit cases). And Not filing your ITR on time can prompt a penalty, but there are additional consequences and inconveniences with the delay and penalties, and today we are exploring the same here:

1. Penalty for Late Filing u/s 234F
2. Reduced Time for Revising Your Return
3. Payment of Interest
4. Carry Forward of Losses is Not allowed
5. Delay in Receiving Refunds

Penalty for Late Filing Income Tax Return u/s 234F

As per the modified rules notified under section 234F of the Income Tax Act that is already in action from 1 April 2017, filing your ITR after the due date can make you liable to pay a maximum penalty of ₹ 5,000.

Let’s understand it more clearly if you file ITR after 31st July 2024 (Non-audit) and 31^st Oct 2024 (Audit cases), you will be liable to pay a penalty of ₹ 1,000. Total Income is more than Rs 5,00,000 then the penalty farthest will be expanded to ₹ 5,000.

Late Income Tax Filing Fee Details
E- Filing Date	Total income ₹ 5,00,000	Total income of more than ₹ 5,00,000
Before 31st July 2024 (Non-audit) and 31st Oct 2024 (Audit cases)	₹ 0	₹ 0
After Due Date But Before 31st December	₹ 1,000	₹ 5,000

Note: From AY 2021-22, there is no concept of an INR 10,000 penalty. Now the maximum penalty under section 234F is INR 5000 only.

Reduced Time for Revising Your Return

Suppose you are filing your ITR and you wind up making a mistake. Then, according to the changed rules, you just have time till three months prior to the end of the relevant Assessment year to make the change (for ITRs from FY 2021-22).

Prior to this modification, taxpayers had a 2-year long window to do corrections (revise) and resubmit an erroneous ITR. The same is now being reduced to three months prior to the end of the relevant assessment year. Thus the earlier you file, the longer would be the window available to you for performing all the corrections or revise your returns to rectify errors if any.

Payment of Interest

In any case, if you failed to file income tax returns on or before the deadline, you would be required to pay interest at the rate of 1% for each month, or part of a month, on the amount of unpaid tax according to section 234A.

Carry Forward of Losses are not allowed

If you faced any losses during the year such as loss under the head Capital Gains or any loss in your business, make sure you file your ITR on or before the last date. Not filing ITR on time will deprive you to carry forward all your losses in the next years to set off against income in future years.

Postponement in Receiving Refunds

In cases where you are qualified for receiving a refund from the government for excess taxes you have paid, you should file your return before the due date to get the refund at the earliest.

We engraved here some very important and must-know facts about the consequences and inconveniences of the Late Filing of Income Tax Returns. We hope you will find it beneficial and informative. No one likes penalty or punishment so make sure to keep track of all the GST due dates and fill the ITR before the due date.

8 Mistakes To Avoid Before Filing ITR Forms:

• Do not claim fake deductions in ITR in order to reduce income tax liability.
• If the income is more than the basic exemption limit, filing of return is mandatory.
• Mention your accumulated income earned from all the employers, if you have changed the job.
• When you select the wrong ITR form, you may get an income tax department notice mentioning under-reporting income as an indifferent form you will miss some information to file.
• A taxpayer is also required to make sure that data feed into ITR is in accordance with Form 26AS. In any discrepancy, the department can ask for an explanation.
• It is required to either e-verify the ITR form or sent it to CPC, Bengaluru for verification. if the assessee fails to e verify his return then the return will be considered as an invalid form.
• It is required to mention every single detail regarding the income in the ITR.
• When you are filing the ITR form late, pay the late filing fees as well in order to keep away the notice from the income tax department.

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