Individual taxpayers (other than those subject to tax audit), who failed to file their Income Tax Return (ITR) before the due date of July 31, 2022 have the option to file their return of income by December 31, 2022 by paying a fine of up to Rs 5,000 as late fee for filing the ITR late, which would get doubled or up to Rs 10,000, after the end of the year 2022.
Late Fee
“The due date for individual taxpayers (other than those subject to tax audit) for the purpose of furnishing tax returns for Financial Year (FY) 2021-22 (AY 2022-23) was 31st July 2022 as per section 139(1) of the Income Tax Act (IT Act). Where a taxpayer who is required to furnish the return of income, fails to do within such prescribed time limit, he/she shall be liable to late fees Rs 5,000 under section 234F. However, if the total income of the person does not exceed Rs 5 lakh, late fees would be restricted to Rs 1,000,” said Dr. Suresh Surana, Founder, RSM India.
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Interest of Tax Payable
Apart from the late fee, a taxpayer will also have to pay interest on tax payable, if any, per month.
“In accordance with Section 234A of the IT Act, interest at the rate of 1 per cent per month or part of month would be applicable for the period of delay in return filing on the tax amount outstanding,” said Dr. Surana.
Last Date of Filing Return
So, if you are still to file your ITR and can’t do it before December 31, 2022, you have to pay a double fine to file it till March 31, 2023 – the last date of filing return for the Assessment Year (AY) 2022-23 (Financial Year 2021-22).
“Any taxpayer who fails to furnish such return by 31st July 2022 may furnish a belated tax return u/s 139(4) of the IT Act on or before 3 months prior to the end of the relevant assessment year (i.e. on or before December 31, 2022 for returns pertaining to FY 2021-22) or before the completion of assessment, whichever is earlier,” said Dr. Surana.
Consequences of Non Filing of ITR
However, if you fail to file your ITR before the end of the Assessment Year – that is March 31, 2023 – you will be in more trouble.
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“The revenue authorities have a right to carry out Best Judgement assessment u/s 148 of the IT Act in case any person fails to furnish his return who is otherwise required to furnish return u/s 139 of the IT Act. Further, such defaulting taxpayers would also be subjected to a penalty u/s 270A for upto 50 per cent of such under-reported income. Further, taxpayers who willfully fail to furnish their tax returns u/s 139(1), 142(2)(i), 148, etc. within due time may be subjected to prosecution u/s 276CC of the IT Act. Such prosecution may be for a period of 6 months to 7 years in case the amount of tax evasion exceeds Rs.25 lakh and from 3 months to 2 years in other cases,” said Dr. Surana.