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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.
CBDT has issued a circular on 9th Sep 21 extending the timelines for certain direct tax compliances for AY 2021-22.
1. ITR Filing due date extension:
i) ITR filing by taxpayers not covered under audit is extended from 30th Sep 21 to 31st Dec 21
ii) ITR filing for Tax audit cases is extended to 15th Feb 22
iii) ITR filing for transfer Pricing is extended to 28th feb 22
iv) ITR filing of Belated or Revised Return for FY 20-21 is extended from 31st Dec 21 to 31st March 22
2. Furnishing Audit Report:
i) Due date to furnish the audit report is extended to 15th Jan 22
ii) Due date to furnish the audit report for transfer pricing cases is extended to 31st Jan 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 No||Particulars||Previous due date||Extended due date|
|1||ITR filing for FY 2020-21 for individuals and entities not liable for tax audit||31st Jul 2021||31st Dec 2021|
|2||ITR filing for FY 2020-21 for taxpayers covered under the tax audit (other than transfer pricing cases)||31st Oct 2021||15th Feb 2021|
|3||ITR filing for FY 2020-21 for taxpayers covered under transfer pricing||30th Nov 2021||28th Feb 2021|
|4||Due date for Revised return / Belated return of income for FY 2020-21||31st Dec 2021||31st Mar 2022|
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 31st Dec 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.
|Late Filing Fee Details as per section 234F|
|E- Filing Date for Individuals / HUF||Total income Below Rs 5,00,000||Total income Above Rs 5,00,000|
|Up to 31st Sep 2021||Rs 0||Rs 0|
|Between 1st October 2021 to 31st December 20201||Rs 1,000||Rs 5,000|
|Between 1st January 21 to 31st Jan 2022||Rs 1,000||Rs 10,000|
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:
Filing the ITR will help individuals when they have to apply for a vehicle loan (2-wheeler or 4-wheeler), House Loan etc.
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 Tax Return can be used as a proof of your Income and Address – mandatory when you apply for a loan or visa.
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.
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.
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.
Apart from the penalty levied by the IT Department, there are other consequences that a taxpayer may face for late filing of returns:
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.
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.
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.
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!
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.
Due date for filing the income tax return for the individuals is been extended from 31st July 2021 to 31st December 2021
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.