ITR filing deadline: As the due date to file Income Tax Returns (ITR) approaches, many taxpayers may be wondering what will happen if they miss the deadline for the Assessment Year 2024-25. Every year, lakhs of taxpayers fail to meet the ITR filing deadline for various reasons.
What happens if you don’t file income tax return by July 31?
As you know, the deadline to file your income tax return for the fiscal year 2023-24 is July 31, 2024. If you miss this deadline, you will get an opportunity to file a belated return until December 31 but will face a penalty in addition to the tax due and interest. However, the most significant loss will be for those in the old tax regime who have already paid taxes and submitted investment and income proofs according to this regime. Missing the deadline could lead to the forfeiture of benefits tied to the old tax regime, as taxpayers will automatically be shifted to the new tax regime—this being the default option. This shift could make the situation more costly, as taxpayers who preferred the old tax regime for its deductions and exemptions will find that the new regime does not offer these benefits.
What is a belated income tax return and how much penalty will you pay for late ITR filing?
For individual taxpayers not required to have their accounts audited, the due date to file the tax return for FY 2023-24 is July 31, 2024. If this deadline is missed, taxpayers can file a belated return by December 31, 2024.
However, a belated return will attract interest under Sections 234A and 234B on any unpaid tax liability, as well as late fees.
Also read: ITR Filing 2024 Due Date: Income tax return deadline to be extended beyond July 31?
What is late fee and penalty on missing ITR filing deadline?
If you miss the last date for filing ITR, you can still submit a late return. Under Section 234F of the Income Tax Act, a late filing fee of Rs 5,000 may be imposed. However, if your income does not exceed Rs 5 lakh, the late filing fee is reduced to Rs 1,000.
Interest will be charged 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 if a taxpayer misses the belated return filing deadline also?
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.