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Penalty for Late Filing of Income Tax Return

Updated on:  

08 min read

The taxpayers have to file the return of their income earned in a financial year upto 31st July of the assessment year unless extended. 

The government gives its taxpaying citizens a 4 month window to consolidate their income details and file their income tax returns every Assessment Year (A.Y.) –starting  from 1 April to 31 July for the previous year. 

As it takes only a few minutes to file your ITR, this is more than reasonable. Aside from paying taxes on time, we must also file the returns by the given due date or face consequences. In this article, we will discuss the penalty for late filing of tax returns.

Latest Update

CBDT has issued a circular on 20th May 2021 extending the timelines for certain direct tax compliances for AY 2021-22.

1. ITR Filing:
i. The due date for filing ITR by taxpayers not covered under audit is extended from 31st July 21 to 30th Sep 21, for Tax audit cases it is extended to 30th Nov 2021 and for transfer Pricing cases, the due date is extended to 31st December. The due date to file a Belated or Revised Return is extended from 31st Dec 2021 to 31st Jan 2022.

2. Furnishing Audit Report:
i. The due date to furnish the audit report is extended to 31st Oct 2021, the audit report for transfer pricing cases is extended to 30th Nov 2021.

Union Budget 2021 Update:
Exemption from ITR filing to senior citizens aged 75 years and above, earning only pension and interest income.

The due date for filing ITR for Assessment Year 2021-22

For the Assessment Year 2021-22, the due date for return filing  as per section 139(1) was 31st July 2021. However the income tax department has extended the due date for all categories of taxpayers (below mentioned in the table). 

Many taxpayers believe that if they have paid their taxes, they have no further obligation. However, missing the ITR filing deadline has legal consequences. Effective from the financial year 2017-18, a late filing fee will be applicable for filing returns after the due date.

Sr NoParticulars Previous due dateExtended due date
1ITR filing for FY 2020-21 for individuals and entities not liable for tax audit 31st Jul 202130th Sep 2021
2ITR filing for FY 2020-21 for taxpayers covered under the tax audit (other than transfer pricing cases)
31st Oct 202130th Nov 2021
9ITR filing for FY 2020-21 for taxpayers covered under transfer pricing
30th Nov 202131st Dec 2021
10Due date for Revised return / Belated return of income for FY 2020-21 31st Dec 202131st Jan 2022
5Filing of Revised return / Belated return for FY 2019-2031st Mar 202131st May 2021

Late Filing Fees u/s 234F

Effective from the FY 2017-28, a late filing fee will be applicable for filing your returns after the due date under section 234F. For instance after due date for FY 2020-21  which is 30th Sep 2021.

The maximum penalty is Rs. 10,000. If you file your ITR after the due date (30th Sep) but before 31 December, a penalty of Rs 5000 will be levied.

 For returns filed later than 31 December of the relevant assessment year, the penalty levied will be increased to Rs.10,000.

There is a relief given to small taxpayers – the IT department has stated that if the total income does not exceed Rs 5 lakh, the maximum penalty levied for delay will be Rs 1000.  

To summarise the section 234F

Edit
Late Filing Fee Details as per section 234F
E- Filing Date for Individuals / HUFTotal income Below Rs 5,00,000Total income Above Rs 5,00,000
Up to 31st Sep 2021Rs 0Rs 0
Between 1st October 2021 to 31st December 20201Rs 1,000Rs 5,000
Between 1st January 21 to 31st Jan 2022Rs 1,000Rs 10,000

Benefits of filing ITR on time

Filing your ITR on time does make you feel responsible and good about yourself, but the benefits don’t end there. Filing your ITR on time can benefit you in more ways:

Easy Loan Approval

Filing the ITR will help individuals when they have to apply for a vehicle loan (2-wheeler or 4-wheeler), House Loan etc.

Claim Tax Refund

If you have a refund due from the Income Tax Department, you should file your Income Tax Return on time to receive the refund as early as possible.

Income & Address Proof

Income Tax Return can be used as a proof of your Income and Address – mandatory when you apply for a loan or visa.

Quick Visa Processing

Most embassies & consulates require you to furnish copies of your tax returns for the past couple of years at the time of the visa application.

Carry Forward Your Losses

If you file the income tax return within the due date, you will be able to carry forward losses to subsequent years. This can be used to set off against income in the coming years.

Avoid Penalty and prosecution

The income tax officer can initiate proceedings for prosecution for a term of 3 months to 2 years and with a fine if you don’t file your ITR. 

If the tax you owe is higher, the period may extend to 10 years.Further, the income tax officer may impose a penalty of up to 50% of the tax due in the case of under-reporting of income.

Consequences of not Filing by the Due Date

Apart from the penalty levied by the IT Department, there are other consequences that a taxpayer may face for late filing of returns:

Unable to set off losses

Losses incurred (other than house property loss) are not allowed to be carried forward to subsequent years. You cannot set off these losses against future gains if the return has not been filed within the due date. However, if there are losses under house property, carry forward losses is permitted.

Interest on the delay of filing return

Apart from the penalty for late filing, interest under section 234A at 1% per month or part thereof will be charged till the date of payment of taxes.

 It is important to note that ITR cannot be filed unless taxes are paid. The calculation of the interest will start from the date falling immediately after the due date i.e. 31 August 2019 for AY 2019-20. So, the longer you wait the more you pay.

Delayed Refunds

In case you’re entitled to receiving a refund from the government for excess taxes paid, you must file the returns before the due date to receive your refund at the earliest.

Frequently Asked Questions

How to File your Return

Filing your income tax returns has never been easier. All you need is your Form 16. Login to Cleartax to file your return – it takes just seven minutes!

What if I miss the Due Date?

In case the taxpayer misses the due date to file his return, he can file a belated return. A belated return can be filed either by the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. For the current assessment year, a belated return can be filed any time before 31st Jan 2022 if the assessee fails to file his return on or before the due date.

What is the due date for filing the return for the FY 2020-21 i.e AY 2021-22 for Individuals?

Due date for filing the income tax return for the individuals is been extended from 31st July 2021 to 30th Sep 2021

If I file my return in the month of September 2020 for AY 2020-21, interest under section 234A will be charged ?

Interest under section 234F will be charged from the original due date that is 31st July 2020 if the tax liability is more than Rs.1,00,000.

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