Know about the consequences of filing Income Tax return (ITR Filing) after the deadline of 31 July 2024
For individual taxpayers whose accounts do not require auditing, the last date to file income tax returns (ITR filing) for FY 2023–24 (AY 2024–25) is July 31, 2024. Missing this deadline results in penalties and other disadvantages.
Penalty for Late Filing of ITR
Under Section 234F of the Income Tax Act, 1961, a penalty of up to Rs 5,000 is imposed for ITR filing after the deadline. For small taxpayers with taxable income not exceeding Rs 5 lakh, the penalty is restricted to Rs 1,000. This penalty applies even if the belated ITR shows zero tax payable. A belated ITR can only be submitted if the challan information for the late filing fee is included in the ITR form.
Penal Interest on Tax Payable
In addition to the penalty, individuals must pay penal interest on the pending tax payable when filing a belated ITR.
Mandatory Penalty for Late Filing
Certain taxpayers must mandatorily pay penalties if they miss the ITR filing deadline:
1. Income Exceeds Basic Exemption Limit:
A penalty is levied if the taxpayer’s taxable income exceeds the basic exemption limit. The default tax regime is the new tax regime, where income up to Rs 3 lakh is exempt. Under the old tax regime, the exemption limit varies with age.
2. Conditions under Section 139(1):
Even if taxable income does not exceed the basic exemption limit, taxpayers may need to file their tax return if they meet certain conditions specified in Section 139(1). Filing late in these cases results in penalties. These conditions include:
- Spending Rs 2 lakh or more on foreign travel.
- Paying Rs 1 lakh or more in electricity bills.
- Depositing Rs 1 crore or more in current accounts.
- Other high-value transactions prescribed by the Central Board of Direct Taxes.
3. Holding Foreign Assets:
Resident individuals investing in foreign assets, earning rental income from abroad, or having authority over foreign accounts must file an ITR, even if their taxable income is below the exemption limit. Late filing fees apply if submitted after the due date.
No Penalty for Certain Taxpayers
Individuals filing an ITR to receive a tax refund will not face penalties if their taxable income is below the basic exemption limit, which is considered before deductions.
Filing Belated ITR
Filing a belated ITR follows the same process as filing before the deadline. However, select section 139(4) instead of 139(1) in the ITR form.
Also Read: FAQs on online filing of ITR-1
Other Consequences of Late filing of ITR
Filing an ITR after the due date has several drawbacks. Besides penalties, individuals cannot carry forward losses from capital gains, business income, and other sources (except house property losses). Additionally, they cannot choose the new tax regime for Assessment Year 2024-25 when filing a late ITR.
By understanding these consequences, taxpayers can better plan and ensure timely filing of their ITR to avoid penalties and other disadvantages.
Also Read: Discard ITR Option Available from AY 2023-24: Discard the Wrong ITR and Refile Afresh
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