The deadline for filing Income Tax Returns (ITR) is fast approaching, with the final date set for July 31 this year. Taxpayers who miss this deadline could face significant consequences. If you miss the July 31 deadline for filing your ITR, you can still file a belated return by December 31, 2024. However, there are several consequences to be aware of.
Missed Deadline Consequences
If individuals fail to meet the July 31 deadline, they have until December 31, 2024, to file a belated return. However, missing the initial deadline will result in automatic assignment to the new tax regime. This means taxpayers will forfeit the option to select the old regime for the respective financial year and will be automatically placed under the new tax regime. The new tax regime, introduced in 2020, features revised tax slabs and concessionary rates, offering an alternative to the traditional system.
Penalties for Late Filing
Interest Penalty: An interest charge of 1 per cent per month or part of a month on the unpaid tax amount will be imposed, as stipulated under Section 234A.
Late Fee: A late fee of Rs 5,000 will be imposed under Section 234F. This fee is reduced to Rs 1,000 if your total income is below Rs 5 lakh.
Loss Adjustment: Losses from sources such as the stock market, mutual funds, properties, or businesses can be carried forward to offset future income and reduce tax liability. However, this benefit is forfeited if you do not file your ITR on time.
Additional Implications
Taxpayers filing their returns late will also lose the opportunity to carry forward any capital losses they might have incurred. Consequently, they will be unable to offset these losses against future gains, potentially leading to a higher tax liability in the coming years.
As the deadline nears, taxpayers are urged to ensure their ITR is filed promptly to avoid these penalties and complications.