The last date for filing income tax (I-T) returns for the financial year 2022-23 (assessment year 2023-24) is July 31. The I-T department has advised taxpayers not to wait until the last minute and file their returns as soon as possible. According to Union Finance Minister Nirmala Sitharaman already 7.4 crore entities, including individuals have filed their income tax returns.
"There has been a 6.18 per cent increase in the number of persons filing Income Tax Returns in FY22-23 as compared to persons in FY21-22," Sitharaman said in the Lok Sabha on Monday. With the rise in ITR filings and the finance ministry's top official already dismissing the need for a deadline extension, it seems taxpayers have no other option but to complete the task in the next few days.
What Happens If You Miss ITR Deadline?
Filing Income Tax Returns (ITR) annually is mandatory under Section 139 of the Income Tax Act. However, it should be noted that for individuals ITR becomes mandatory only after your total income exceeds the exemption limit. The ITR must be submitted within the prescribed due date mentioned in Section 139(1). Historically, the due date for filing IT returns has been July 31, but it is subject to change depending on the government's decision.
According to the I-T department, failing to meet this deadline may attract a penalty of Rs 5,000 under Section 234F. However, if your total income for the relevant year is below Rs 5 lakh, the penalty is reduced to Rs 1,000.
Additionally, if you are liable to pay taxes and miss the ITR deadline, the due amount will attract additional interest till you make the payment. Under section 234A, the taxpayer is liable to pay simple interest at 1 per cent per month or part of a month for delay in filing the return of income.
Loss Of Interest On Refunds
Filing income tax returns is the only way to claim a refund for excess taxes deducted. Moreover, taxpayers are entitled to receive interest on refunds, similar to the interest charged on due taxes, as long as they comply with the prescribed schedule for filing the return. Refund attracts interest at the rate of 0.5 per cent per month and is paid from April 1 until the date of refund.
As per Section 244A of the Income-tax Act, if the refund is related to excess payment of TDS or TCS or Advance Tax, the interest on the refund will be applicable from April 1 of the relevant year to the date of refund granted, provided the income tax return (ITR) is filed within the due date.
If you file your tax return after the due date (July 31), the interest on the refund will be calculated from the date you actually file the return to the date when the refund is granted. It won't be calculated from April 1, as it would have been if you filed the return on time.
Penalty Under Section 234E
Under Section 234E, individuals who are unable to file TCS or TDS statements by the due date must pay a penalty ranging from Rs. 10,000 to Rs. 1,00,000. The penalty under Section 234E is a fine of Rs 200 per day until the TCS or TDS is paid.
Imprisonment
Failure to file your income tax return could lead to potential imprisonment for a period ranging from 6 months to 7 years, as per Section 276CC of the Income Tax Act. However, the Finance Act 2022 introduced an amendment that, with effect from AY 2022-23, no such prosecution will occur if you are able to file an updated return within the time provided in Section 139(8A). The due date for filing a revised return for AY 2022-23 (FY 2021-22) is March 31, 2025.
Also Read: Seven Things You Should Remember While Filing Income Tax Return This Season
File Belated Income Tax Returns If You Miss Deadline
Section 139 of the Income Tax Act 1961 encompasses different provisions concerning the late filing of income tax returns. According to the income tax website, if the ITR is not filed by the specified due date as per section 139(1), it will be considered a belated return, and such belated returns are filed under section 139(4).
I-T department says, "A belated return can be filed at any time three months before the end of the relevant assessment year or before completion of assessment, whichever is earlier."
However, it also lists out, the consequences of delay in filing. As per the income tax department, a delay in filing the return may attract the following consequences:
- Loss (other than loss under the head 'income from house property') cannot be carried forward
- Levy of interest under section 234A
- Levy of fee under section 234F
- Exemptions under sections 10A, and 10B, are not available
- Deduction under Part-C of Chapter VI-A shall not be available
Revised Return
In case a taxpayer submits documents with error or omission due to a genuine mistake, they have the option to file a revised return under Section 139(5) of the Income Tax Act. The deadline for filing a revised return is until December 31, after the assessment process is completed. Even a belated return can be revised within this time limit, and if needed, a revised return can be revised again to fix any errors found in the first revised return.
Updated Return
The Finance Act, 2022 introduced Section 139(8A), allowing taxpayers to disclose their actual income even after the deadline for filing belated or revised returns. Taxpayers can submit an updated return within 12 months after the assessment year's conclusion, subject to a 25 per cent tax rate. However, certain limitations apply, such as not being able to declare losses, reduced tax liabilities, or ongoing search/survey procedures. Once an updated return is filed, another revised updated return for the same year is not allowed.
- Section 234F is applicable when you fail to meet the ITR filing deadline and want to file the ITR after that. This could result in a penalty of Rs 5,000.
- Section 234A is applicable in case the ITR filing is delayed. The government charges a 1 per cent interest per month on the due amount.
- Section 244A entitles you to interest on refund related to excess payment of TDS or TCS or Advance Tax. It is only applicable if ITR is filed within the due date and calculated from April 1 to the date of refund granted.