Penalty for Late Filing of Income Tax Return

21 Dec 2022|

1 min read |

by ICICI Securities Team

The last date to file your income tax returns (ITR) in the financial year 2020–21 was December 31, though usually, it is July 31 of the respective assessment year. However, not filing the ITR on time can lead to penalties and other consequences, per the Income Tax Act 1961. Continue reading to know more about what happens when one fails to file ITR.

Penalty for Late Filing of Income Tax Returns

The income tax department penalises you for late filing of income tax returns under several sections, such as Section 234F, Section 234A, Section 271H, and Section 234E.

ITR late filing penalty under Section 234F

The penalty for not filing ITR within the deadline makes you liable to pay Rs 5,000 under Section 234F. From the financial year 2021, the income tax department reduced the penalty from Rs 10,000 to Rs 5,000 if one fails to file income tax returns.

However, if your total income is less than Rs 5 lakh and you fail to file ITR, you will be required to pay Rs 1,000 as a penalty.

ITR late filing penalty under Section 234A

Furthermore, you will have to pay interest every month on unpaid tax, as per Section 234A. The interest rate is 1% every month on the amount of unpaid tax. So, the longer you wait to file your returns, the higher your interest amount will be.

ITR late filing penalty under Section 271H and Section 234E

If you haven’t filed TDS or TCS statements within the due date, you may have to pay a penalty ranging from Rs 10,000 – 1,00,000 besides the penalty under section 234E. Under section 234E, you’re liable to pay Rs 200 per day until your TDS/TCS is paid.

Other late fees for ITR

On capital gains/losses: Losses logged under the capital gains header of the ITR form cannot be carried forward to the next year for set off against income if you fail to file returns by the due date.

Less revision time: If you make a mistake while filing the ITR, you get a chance to rectify the mistake until the end of the said assessment year. But if you file long after the due date has passed, you’ll have less time to realize and rectify your mistake.

Delayed refunds: If you’re expecting to receive refunds from the government, then filing late ITR can also delay those refunds.

Conclusion

While there are several penalties and late fees for ITR after the due date under Sections 234F, 234A, 271H, and 234E, untimely filing may also lead to suspension or termination of your employment by your employer. So, if you’ve missed the deadline to file your ITR, be mindful of filing the ITR and paying the penalty within the due date.

Disclaimer

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