Missed the ITR filing deadline? Here’s what you should do

New Delhi: For those who missed the Income Tax Return (ITR) filing deadline for the Assessment Year 2023-24, which was July 31, 2023, there’s no need to panic. There are still options available, including the provision to file a belated ITR, although it comes with certain penalties and restrictions.

How to File a Belated ITR

The last date to file a belated ITR for the financial year 2022-23 (assessment year 2023-24) is December 31, 2023. However, it’s important to be aware of the costs involved. Individuals are required to pay a penalty of up to Rs 5,000 under Section 234F of the Income Tax Act, 1961, while filing belated ITRs. For those whose total income is less than Rs 5 lakh, the late filing fee is reduced to Rs 1,000.

Disadvantages of Belated Return Filing

Filing a belated return does have some disadvantages. For instance, certain losses, like business and capital losses, cannot be carried forward for set off in subsequent years. However, an exception is available for losses from house property, which can be carried forward even if you file your returns late. Additionally, deductions or exemptions under specific sections of the Income Tax Act will not be available if you delay ITR filing.

Penalties for Non-Filing

In case you have paid your taxes on time but missed filing returns, you cannot file returns or apply for a condonation of delay. The income tax department may issue a notice under Section 271F for not filing ITR, and you may have to pay a penalty of up to Rs. 5,000 for missing the deadline. However, if you have a genuine explanation for not filing and if the officer is satisfied with the reason, you may not have to pay the penalty. On the other hand, if you have underreported the income, a penalty of up to 200 percent of the tax payable will be levied. But if the taxpayer has paid taxes with interest after the deadline and has under-reported the income, the assessing officer may excuse the penalty, and no further penalty will be levied.

Responding to Notices

If you receive a notice from the income tax department, it’s crucial to respond to it on the income tax e-filing portal and file the ITR to comply with the notice. Failure to do so can lead to legal action, including imprisonment for up to seven years.

Despite the penalties and restrictions, it’s essential to file your belated ITR to avoid further complications. The December 31, 2023, deadline allows some breathing room, but taxpayers should take the necessary steps promptly to meet their tax obligations and prevent any unnecessary legal entanglements.