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Explained: Everything about the late filing of income tax returns

Late filing charges for late income tax returns under Section 234F of the Income-tax (I-T) Act

The deadline for filing income tax returns (ITR) for the financial year (FY) 2020-21 or assessment year (AY) 2021-22 is 31 December 2021. However, you can still file a return by March 31, 2022.

However, to file a delayed return, you will have to pay additional interest on penalties and taxes. In addition, there are some limitations to late returns. Read more to understand.

What is a late income tax return?

As the name implies, a late return is a return filed after the due date specified in the income tax rules. "Under Section 139 (1) of the Income-tax Act, a taxpayer (other than a company) whose accounts are not required to be audited by a chartered accountant has to reimburse his income or before July 31 of the relevant assessment year."

However, “If a taxpayer fails to do so, section 139 (4) of the Act allows the taxpayer to file a return three months before the end of the assessment year i.e. on completion of the relevant assessment year or late till 31st December. Assessment, whichever is earlier?

In view of the inconvenience caused by the epidemic, the Central Board of Direct Taxes (CBDT) has twice extended the due date for filing of original returns from 31st July 2021 to 30th September 2021 and later to 31st December 2021.

However, “the ITR deadline was expected to be extended but it did not happen as the MoF thought otherwise. Therefore, the last date for filing ITR for the financial year 2020-21 is March 31, 2022, with delayed returns as per the provisions of Section 139 (4) of the Income-tax Act.

Therefore, be sure to file your return before March 31 and do not miss this deadline. Because, “If the March deadline is missed, the taxpayer will not be able to voluntarily file the ITR. In such a case, the ITR can only be filed in response to a notice from the tax department.

Penalties and Interest

If you miss the extended due date for filing ITR, you will have to pay a penalty for late return filing. if The total taxable income in the financial year is Rs. 5 lakhs or more the late income tax return under section 234F of the Income-tax (I-T) Act is charged for late filing of Rs. 5000 & Rs.1000 If not more than Rs. 5,00,000 / -

However, “If the total income is less than the basic tax deduction limit, subject to certain exceptions, no late fee will be charged for the late refund. The basic exemption limit is Rs 2.5 lakh for persons up to 60 years, Rs 3 lakh for persons between 60 years and 80 years and Rs 5 lakh for persons above 80 years.

In addition, if the tax is payable, they attract punitive interest. “Under section 234A, 1 per cent interest per month or part thereof will be levied on the unpaid tax amount. The calculation of interest will start from the date immediately following the due date for AY 2021-22, i.e. 31st December 2021.

Limit of late income tax return

Not only do you have to pay fines and interest on the taxes you pay, but there are also limitations on late returns. No losses under the headings of "Capital Profit", "Business and Occupation" and "Damage to Race Horses" will be allowed to be carried forward or remitted from next year. However, even in the case of delayed returns, losses from "household assets" and "unsustainable depreciation" can be carried forward.

In addition, if the taxpayer is eligible for a refund, the department pays interest on such refund under section 244A of the Act for reasons of additional TDS / TCS / advance tax. If the return is filed within the original due date, interest accrues from the first day of the relevant assessment year. In case of a delayed return, interest is received from the date of return of income, resulting in loss of a portion of the interest due to late filing of return.

You may have to pay a penalty and interest for filing the late return, however, you will have to file the return as per the income tax rules.

Regards

Alliance Tax Experts team

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