What happens if you miss the ITR filing deadline?

The ITR filing deadline is a really important date which needs to be kept in mind by all the taxpayers of India. It is a legal obligation for all the taxpayers to file Income Tax Return (ITR) of their income earned up to 31st July of the Assessment Year (AY) relevant to the Fiscal Year (FY), unless this date is extended.

A window of 4 months (1st April to 31st July, unless extended) is provided by the Government of India (GOI) every AY for the taxpayers so that they can gather their income details for the relevant FY and file the ITR accordingly. 

Filing an ITR can be done easily in a timely manner with Registrationkraft’s assistance. Along with paying the taxes in a timely manner, it is necessary to file the returns by the due date. Delayed submission of ITR can attract penalties. Before going ahead you must know the benefits of filing ITR.

In this article, we will discuss what happens if you miss the ITR filing deadline i.e., 31st July.

Due dates for Income Tax Filing for FY 2023-24 (AY 2024-25)

What are the consequences of missing the ITR Deadline?

Filing ITR in a timely manner is crucial for the taxpayers in India. Failure to file ITR on time can attract penalties and interest charges, which can be heavy on the pocket. In addition to this, in some cases, filing the ITR in a late manner may lead to the suspension or termination of your employment by your employer. 

Missing the deadline for ITR filing can lead to the following consequences:

• Payment of Interest: Sections 234A of the Income Tax Act, 1961 states that taxpayers who fail to file their income tax returns within the prescribed time have to pay an interest rate of 1% every month on the unpaid tax amount. The filing of ITR cannot be done unless this amount is paid. The interest is calculated after the due date for the tax filing which is generally 31st July. An extended delay in ITR filing can lead to a higher interest which will ultimately result in an increased overall penalty for ITR’s late filing.
• Late ITR filing leads to Penalties: If your annual income crosses Rs. 5 lakhs, a late fee will be imposed which is up to Rs. 5,000 and may increase to Rs 10,000 if the ITR is filed after the prescribed due date. 
• TCS/TDS Penalty as per Section 271H: According to Section 271H of the Income Tax Act, 1961, individuals who fail to file Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) in a timely manner are liable to pay a penalty or fine which can range from Rs. 10,000 to Rs. 100,000. Additionally, they are liable to pay a fine of Rs. 200/day until the tax is paid as per Section 234E.

Although you have the option of filing a late ITR in case you miss the deadline, it is important to consider all the consequences of filing a belated tax return.

What is a Belated Tax Return?

The term ‘Belated Tax Return’ is used to refer to the income tax return which is filed by the taxpayers after the deadline stated by the Income Tax Department. Generally, the deadline for ITR is 31st July of AY. For instance, for FY 2023-2024, the deadline for filing ITR would be 31st July, 2024. If the taxpayers do not file their ITR by the deadline, they do have the option of filing it later as a belated tax return. However, the penalties need to be paid for the late ITR filing. The belated tax return deadline for FY 2023-2024 is 31st December, 2024.

Steps involved in filing a Belated Income Tax Return

For filing a belated ITR, the following steps need to taken by the taxpayers:

• Assembling all the relevant documents: All the necessary documents which are related to the income, investments, deductions, and other financial information must be gathered for the AY for which the taxpayers are filing the belated ITR.
• Selecting the appropriate ITR Form: It is crucial to determine the right ITR form based on the income sources and the category. Taxpayers can check the official portal of the Income Tax Department for detailed information for choosing the correct form.
• Submitting the ITR Form using the Income Tax e-Filing Portal: 
  • Visit the Income Tax e-filing portal and login using your credentials. If you don’t have an account, you must register as a new user.
  • Once you’ve logged onto the portal, select ““Income Tax Returns”.
  • Thereafter, click on the “e-File” tab and select the “Income Tax Returns” option
  • Fill in all the required details, such as the Assessment Year (AY) and the applicable ITR Form.
  • Add in all the necessary details such as your personal information, income details, deductions and taxes paid.
  • Review all the details provided and make sure they’re correct. Once you’re confident of the accuracy of all the details, you can finally submit the return electronically on the portal.

What is a Revised Return?

There are instances wherein taxpayers discover an error or omission in their original or belated ITR due to genuine mistakes. In such cases, they can opt for a Revised Return according to Income Tax Act, 1961’s Section 139(5). This revised returns enables rectification of any faultiness or oversights on the part of the taxpayers in ITRs previously filed by them. 

The deadline for Revised Return is the same as for Belated Return i.e., 31st December, 2024. If there are any errors or omissions in the initial revised return, the same can be corrected upon revision of the initial revised return within the prescribed period.

Taxpayers are subject to penalty in case of missing the original deadline as outlined in Section 234F of the Income Tax Act. The penalty amounts are as mentioned below:

• A penalty amount of Rs. 1,000 is incurred on individuals with a gross income ranging from Rs. 2.5 lakhs to Rs. 5 lakhs.
• A penalty amount of Rs. 5,000 is incurred on individuals with a gross income exceeding Rs. 5 lakhs.

Note: Individuals with a gross income of up to Rs. 2.5 lakhs are not subject to any penalties.

What is an Updated Return?

The Income Tax Act’s Section 139(A) enables all the tax-paying individuals to update their ITR within a period of 2 years i.e., 24 months from the end of the relevant AY. For FY 2023-2024 (AY 2024-2025), the due date of Updated Return is 31st March, 2027. The concept of Updated Return was introduced to allow eligible taxpayers to file or update their ITRs within a specified period albeit by paying additional tax, interest and penalty in an attempt to increase the voluntary compliance and to assist taxpayers in avoiding penal consequences and further litigation if such omissions are later discovered by the tax authorities. 

An Updated Return cannot be filed under Section 139 (8A) in the following cases:

• If the updated return has already been filed.
• If the updated return is the return of the loss.
• If the updated return reduces Income Tax Liability in the return which was filed earlier.

What is a Defective Return?

An assessment officer can deem a return as a ‘defective return’ if the ITR is not filed accurately and contains errors. If a return is considered as a defective return, it must be rectified within a period of 15 days from the receipt of the notice by the assessment officer. If the issue is not rectified within this time limit, the return shall be deemed as invalid. This means that such a return will not be counted as being filed and will lead to fines, penalties and interest charges as applicable.

Conclusion 

Taxpayers who miss the ITR deadline i.e., 31st July every year (unless extended by GOI) have to face consequences which include penalties, fines, and interest charges. A window of 4 months is provided for filing ITR in a timely manner. It is a legal obligation to file ITR and be in the good books of the Income Tax Department. Even if you do miss the deadline for ITR filing, you have the option to file a belated ITR. However, along with filing a belated ITR, you have to pay a penalty amount based on your gross income. To ensure ITR filing for FY 2023-2024 (AY 2024-2025) in a timely and hassle-free manner, connect with Registrationkraft team!