Unless granted an extension, taxpayers must file their Income Tax Returns (ITR) for income earned by July 31 of the relevant assessment year. The government provides a four-month window each assessment year for taxpayers to compile their income details from the relevant financial year and file their ITR.
Filing the ITR takes only a few minutes, making this timeframe more than sufficient. Timely tax payments and return filings are crucial to avoid penalties. In this post, we will discuss the consequences of late ITR filings and the penalties for filing an ITR after July 31, 2024.
Know the Return Filing Due Date for the Assessment Year 2024-25
For the assessment year 2024-25, the income tax ITR filing due date given under Section 139(1) is July 31st, unless extended by the government. Many taxpayers mistakenly believe that they have no further obligations once they have paid their taxes. However, missing the ITR filing deadline can have legal consequences, which have started from the financial year 2017-18; a late filing fee is imposed for returns filed after the due date. Below are the income tax ITR filing due dates for respective entities or individuals:
- ITR filing for individuals and entities not liable for a tax audit, the due date is 31st July 2024.
- The ITR filing for taxpayers covered under tax audit will be on 31st October 2024.
- The ITR filing for taxpayers covered under transfer pricing will be on 30th November 2024.
- The due date for the revised or belated return of income for the financial year 2024/25 will be 31st December 2024.
What is Section 234F of the Income Tax Act?
Effective from the financial year 2017-18, a late filing fee will be applicable for filing the return after the due date under Section 234F. For instance, the due date for filing returns from the financial year 2023-24 is 31st July 2024. Still, if anybody misses this deadline, then they can file a belated return by 31st December 2024, but a penalty for late filing will apply.
Read Our Article: ITR 4 in Income Tax Return filing
What Penalties Will you face for Filing Late ITR after 31st July 2024?
A maximum penalty for filing ITR after 31st July 2024 is Rs 5000 will be imposed if the taxpayer files their ITR after 31st July 2024 but before 31st December 2024. However, there is a relief for small taxpayers: if their total income does not exceed Rs 5 lac, the maximum penalty will be Rs 1000. To summarize, as per Section 234F, the late filing fee details are as follows:
- If the taxpayer file ITR by 31st July 2024, there is no penalty.
- If the taxpayer files between 1st August 2024 and 31st December 2024, the penalty is Rs 1,000 for income below Rs 5 Lac and Rs 5,000 for income above Rs 5 Lac.
What are the Advantages of Filing an ITR on time?
Filing the Income Tax Return on time instils a sense of responsibility and satisfaction and offers several practical benefits. Below are some of the key advantages of timely ITR filing:
1. Easy Loan Approval
The timely ITR filing can greatly facilitate the process of obtaining loans, whether for vehicles, loans or personal purposes. Lenders often require ITR receipts as proof of income and financial stability.
2. Claim Tax Refund
If a taxpayer has overpaid taxes, filing the ITR filing ensures that the tax refund is processed and the taxpayer will receive any due refunds without necessary delays.
3. Income and Address Proof
The IT receipts serve as valid proof of income and address, which is essential when applying for loans or other official purposes.
4. Quick Visa Processing
Many embassies require copies of the tax returns for the past few years when processing visa applications because timely ITR filing can help expedite the process.
5. Avoid Penalty and Fines
Filing the ITR within the due date helps to avoid penalties and proceedings initiated by the income tax department.
What are the Consequences of Missing the Deadline for Filing?
The consequences of missing the deadline for ITR filing can lead to serious charges, including hefty penalties and legal action. Below are the consequences of missing the deadline for ITR filing:
- Prosecution
If the taxpayer wilfully fails to file the return even after receiving notices, the tax officer can initiate prosecution proceedings, which can result in imprisonment for a term ranging from three months to two years along with a fine, and the imprisonment period may extend up to seven years.
- Penalty
The income tax officer may impose a penalty of up to 50% of the tax due if the taxpayer has underreported the income.
- Unable to Set Off Losses
Losses can’t be carried forward to subsequent years if the return is not filed by the due date.
- Interest on Delays
In addition to the penalty, interest will be charged under section 234A at 1% per month or part thereof on the tax due until the taxes are paid.
- Delayed Refunds
If the taxpayer is entitled to a tax refund, filing the return after the due date will delay the refund processing.
What to do if You Haven’t Filed ITR for Previous Financial Years?
If the taxpayer misses the Income Tax ITR filing due date for the previous year, then there are two options to address the situation:
- Apply for Condonation under Section 119(2)(b)
An individual can submit an application for condonation of delay under Section 119(2)(b) of the Income Tax Act. This provision allows taxpayers to request relief for late filing for genuine reasons.
- File an Updated Return Under Section 139(8A)
Alternatively, the individual can file an updated return under Section 139 (8A), This option is available for rectifying errors or omissions in previous returns, allowing the submission of an updated return and address for any discrepancies or missed filings within two years, the two years is calculated from the end of the financial year in which the original return was filed.
Conclusion
Missing an Income Tax ITR Due date will lead to penalties, legal consequences, and delays in refunds. However, adhering to deadlines ensures smooth processing of the return, easier access to loans, and timely tax refunds. In case you miss the deadlines, promptly address the situation through condonation or update returns and mitigate some of the penalties. Therefore, to maintain financial health, timely filing of the ITR is necessary.
FAQs
What will happen if you file an ITR after 31st July 2024?
Filing an ITR after 31st July 2024 incurs a late fee of up to Rs 1,000 if income is below Rs 5 lac, and for income above Rs 5 Lac, the penalty will increase up to Rs 5,000.
What is the deadline for filing an ITR in 2024?
The deadline for filing an ITR is 31st July 2024.
How long can you file a belated return under the Income Tax Act?
A belated return under the Income Tax Act can be filed until the end of the assessment year or before the assessment is completed, whichever comes first.
How much does a CA charge for filing an ITR?
The fee for filing an ITR by a CA will vary based on the case to case but it typically starts from Rs 1,000 to Rs 2,000.
How can a taxpayer pay a late filing penalty?
To pay a late filing penalty, use personal or corporate debit cards or credit cards.
Read Our Article: Consequences of not filing ITR
