The government gives its taxpaying citizens 4 months of window period to plan their investments and file their income tax returns every financial year – from 1 April to 31 July. Considering that it takes only a few minutes to file your ITR, this is more than reasonable. Our obligation towards contributing to the nation’s economy doesn’t end with paying taxes. We must also file the returns by the due date or face consequences. In this article, we will discuss the penalty for late filing of tax returns for stragglers.
  1. Due date for filing ITR for Assessment Year 2018-19
  2. Late filing fees u/s 234F
  3. Benefits of filing ITR on time
  4. Consequences of not filing by due date
  5. How to file your return
  6. What if I miss the due date?

1. The due date for filing ITR for Assessment Year 2018-19

For the Assessment Year 2018-19, the due date for return filing was 31st August 2018. Many believe that if they have paid their taxes, they have no further obligation. However, missing the ITR filing deadline has legal consequence. Effective from the financial year 2017-18, a late filing fee will be applicable for filing returns after the due date.

2. Late Filing Fees u/s 234F

Effective from the financial year 2017-18 a late filing fee will be applicable for filing your returns after the due date i.e. 31st August 2018 under section 234F.  The maximum penalty which can be charged is Rs. 10,000. If you file your ITR after the due date (31st August 2018) but before 31st December 2018, a penalty of Rs 5,000 will be levied. For returns filed later than 31st December 2018, 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 1,000.

To summarise the section 234F:

Late Filing Fee Details as per section 234F
E- Filing Date Total income Below Rs 5,00,000 Total income Above Rs 5,00,000
Up to 31st August 2018 Rs 0 Rs 0
Between 1st September 2018 to 31st December 18 Rs 1,000 Rs 5,000
Between 1st January 19 to 31st March 19 Rs 1,000 Rs 10,000

3. 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:

1. 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.

2. 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.

3. Income & Address Proof

Income Tax Return can be used as a proof of your Income and Address.

4. 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.

5. 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, which can be used to set off against income of subsequent years.

6. Avoid Penalty

If you are required to file your Tax returns but didn’t, then the tax officer deserves the right to impose a penalty of up to Rs.5,000.

4. 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:

a. Unable to set off losses

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

b. Interest on the delay of filing return

Apart from the penalty for late filing, an 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 if taxes haven’t been paid. The calculation of the penalty will start from the date falling immediately after the due date i.e. 31st August 2018. So, the longer you wait the more you pay.

c. Delayed Refunds

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

5. 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!

6. What if I miss the Due Date?

Taxpayers must pay taxes and file the return on or before 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 March 2019 if the assessee fails to file his return on or before 31st August 2018.  

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– If you have missed the due date to file your return, you can still file it before 31 Dec 2018 by paying a fee of Rs 5,000. If you are filing after 31 December 2018, you will have to pay a fee of Rs 10,000. Also to note that the time limit for filing a return late for FY 2017-18 expires on 31 March 2019.

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