As the last date for filing Income Tax Return (ITR) is approaching, many taxpayers will be worried about what will happen if they miss filing tax return for assessment year 2024-25? We want to bring to your notice that every year lakhs of taxpayers are not able to file returns on time due to various reasons.
What happens if you don’t file ITR by July 31?
As you know, the last date for filing tax returns for the financial year 2023-24 is 31 July 2024. That is, now only 3 days are left to file ITR. If you miss this deadline, then you will get a chance to file belated tax return till 31 December, but in addition to the tax and interest payable, you will also have to pay an extra charge in the form of penalty.
However, the biggest losers will be those in the old tax regime who have already paid taxes and submitted proof of investments and income as per the regime. Failure to file tax returns on time may result in forfeiture of benefits associated with the old tax regime as taxpayers will automatically be transferred to the new tax regime. The new regime is a default option. This change may make the situation more costly as taxpayers who prefer the old tax regime for tax benefits such as deductions and exemptions will find that these tax benefits are not available in the new regime.
Also read : ITR Filing 2024 Due Date: Has the last date for filing ITR been extended? This is the update so far
What is belated return and how much penalty will be charged for it?
Those who are not able to file ITR by 31st July will have a question in their mind that even after the last date has passed, the return is being filed but it is known as belated income tax return. What is belated income tax return and how much penalty is charged for filing ITR late? Let’s know about it.
Taxpayers are not required to get their accounts audited, the last date for filing tax returns for the financial year 2023-24 is July 31, 2024. If they miss filing the return on time, taxpayers can file belated income tax return till December 31, 2024.
However, interest is levied under sections 234A and 234B of the Income Tax Act for the delay in filing the belated return i.e. ITR after July 31. This interest will also be levied on any unpaid tax liability and penalty.
Section 234A applies to delays in filing tax returns and charges interest at the rate of 1% per part per month on the outstanding tax amount. Section 234B applies to default in depositing advance tax installments and charges interest at the rate of 1% per part per month on the outstanding advance tax installments.
Also read : ITR Filing on WhatsApp: You can also file ITR through WhatsApp! Check details to get refund
What is the late fee and penalty for delay in filing ITR?
If you have missed the last date to file ITR, you can still file your return late. A late filing charge of Rs 5,000 can be levied under Section 234F of the Income Tax Act. However, if your income does not exceed Rs 5 lakh, the late filing charge is reduced to Rs 1,000.
Section 234A applies to delays in filing tax returns. Interest is charged at the rate of 1% per month on the outstanding tax amount. Failure to pay or underpayment of self-assessment tax may result in a penalty under section 140A(3). It is important to note that the penalty cannot exceed the tax amount in arrears.
Also read: Income Tax Refunds: How many days does it take to get a refund after filing a tax return? Check your status like this
What if a taxpayer fails to file belated return?
Even if they miss filing a belated return, taxpayers still have the option to file an updated tax return. The updated tax return can be filed within two years after the relevant assessment year has passed. For example, the updated return for the financial year 2021-2022 (FY22) i.e. assessment year 2022-23 (AY23) can be submitted till March 31, 2025. If you file the updated return within one year after the assessment year has passed, then 25% extra tax will be levied on the total tax and interest. If the updated return is filed after one year but within two years, then 50% extra tax will be levied on the total tax and interest.
