ITR deadline for filing of income tax return for the Assessment Year 2024-25 will end of July 31 and taxpayers are asked by the Income Tax Department to file their ITR before the due date.

Who should file ITR before July 31?

Individuals and entities whose accounts are not liable for tax audit for the financial year 2023-24 are required to file their income tax returns by July 31.

What is the penalty for missing the ITR deadline of July 31?

Taxpayers who miss the ITR due date of July 31 will have to pay the penalty. These individuals and entities will have time till December 31 to file their ITR along with a late filing fee, which varies according to the income level of tax filers. The ITR filed after the last date is called a belated income tax return.

Under Section 234F of the Income Tax Act, 1961, the tax department imposes a penalty of Rs 1,000 if the individual’s annual taxable income is less than Rs 5 lakh. If the annual income is more than Rs 5 lakh, the penalty amount goes up to Rs 5,000 for filing a belated ITR.

Also read: ITR Filing Date 2024 Live Updates: Income tax return deadline to be extended beyond July 31? What we know so far

Besides this, an interest charge is also imposed at a rate of 1% per month, or part thereof, on the outstanding tax amount from the due date, according to Section 234A of the Income Tax Act. Failure to pay self-assessment tax or underpayment can result in penalties under Section 140A(3) of the Income Tax Act. It is important to note that the penalty cannot exceed the amount of tax in arrears.

What happens if a taxpayer fails to file even the belated return by December 31?

If the belated return deadline is also missed, taxpayers still have the option to file an updated tax return. An updated tax return can be filed within two years from the end of the relevant assessment year.

For example, an updated tax return for March 2022 (AY 2022-23) can be submitted until March 31, 2025. If you file the updated return within one year from the end of the assessment year, an additional tax of 25% on the total tax and interest will apply. If filed after one year but before the two-year deadline, the additional tax will be 50% on the total tax and interest.