Filing Your Income Tax Return: Here Are Important Dates And Potential Penalties

July is a critical month for individual taxpayers as the deadline to file income tax returns (ITR) for the financial year 2023-24, corresponding to the assessment year 2024-25, is July 31, 2024. Understanding the significance of this date and timely filing is essential to avoid potential penalties and other consequences.

Key Differences: Financial Year vs. Assessment Year

The financial year (FY) spans from April 1 to March 31, during which income is earned. The assessment year (AY) follows immediately, where income earned in the financial year is assessed and taxed. For example, income earned between April 1, 2023, and March 31, 2024 (FY23-24), will be assessed in AY 2024-25.

Understanding the Income Tax Return (ITR)

An ITR is a declaration form submitted to the income tax (I-T) department detailing income, expenses, and other financial information for a specific financial year. This submission allows the government to assess tax liability, ensuring accurate earnings disclosure and correct tax payments.

Last Date for Filing ITR for FY23-24

The due date for filing ITR for FY23-24 (AY 2024-25) is July 31, 2024. Filing by this deadline is crucial to avoid penalties and interest on delayed payments.

ALSO READ | What If You Don't File Income Tax Return? Understanding The Financial And Legal Repercussions

Options if You Miss the Deadline: Belated Tax Return

Missing the July 31 deadline allows for filing a belated return up to three months before the end of the relevant assessment year. For FY 2023-24, a belated return can be filed until December 31, 2024. However, penalties apply, and benefits such as carrying forward losses may be forfeited.

Correcting Mistakes: Updated ITR

Taxpayers can file an updated return to rectify mistakes or omissions in the original or belated return. This can be done within two years from the end of the relevant assessment year, up to March 31, 2027, for FY23-24. Importantly, an updated return should not reduce the disclosed income and subsequent tax liability from the original return. This ensures the avoidance of penalties or legal issues related to inaccurate initial filings or omitted income.

Adhering to these guidelines ensures compliance with tax laws and helps maintain financial integrity.