Failure to file their ITR returns by the deadline of 31st July or not filing the ITR at all attracts varied consequences for the taxpayers. Let us understand a little more about these consequences.
For the financial year 2023-2024 or assessment year 2024-2025, the deadline for filing income tax returns is 31st July 2024. Taxpayers have always been encouraged to file their tax returns within time and not miss the deadline. Consequences of not filing ITR or missing the deadline to file ITR might attract various consequences.
ITR Filing Due Date for Non-Audit/Non-TP Cases: July 31st
If a taxpayer is required to file a return, they must do so by the deadline stated in section 139(1), which is July 31 of the applicable assessment year. Here are the implications of failing to meet the July 31 deadline:
- Late Fee
If you miss the deadline of July 31, you can file your tax return by December 31, but it will attract a late fine of Rs.5000 under Section 234F. However, if your total income does not exceed Rs.5 lakh, the late filing fee will be reduced to Rs.1000.
- Penal Statement
A person who owes tax and fails to file his return within the prescribed time is liable to pay interest on the amount of tax due under section 234A in addition to the late filing penalty until the same is paid.
- Loss of Interest on Refunds/ Delay in Refund
Filing income tax return on time is the only way to be eligible to claim refund on any excess taxes deducted. A taxpayer is also eligible to receive interest on refund at the rate of 0.5% per month as long as the authorized filing schedule is followed.
Section 244A of the Income-tax Act 1961 states that if the refund is for an excess payment of TDS, TCS, or Advance Tax, the period for interest on refund shall be from the 1st of April of the relevant year to the date of refund granted if the income tax return (ITR) is filed by the due date i.e. 31st July 2024.
However, if the return is filed after the due date which is 31st July in this case, the interest is calculated from the actual date of filing to the date the refund is granted and not from 1st of April.
- No carry forward of Losses
Aside from the penalties and interest loss, other restrictions are involved with filing a late return. Non-filing of returns by July 31 will also result in the loss of carry forward of losses to subsequent years. It is important to note that only house property losses can be carried forward in the event of late filing.
- Imprisonment and fine provisions
Aside from the fines and interest, the tax laws provides for other penalties which also include imprisonment if the return is not filed on time and the outstanding tax amount exceeds a particular threshold.
Section 276CC penalizes late filing of income tax returns when the amount of tax payable or evaded exceeds Rs.25, 000 with imprisonment ranging from 6 months to 7 years and a fine.
So it is important that taxpayers keep vigilance of the due date of filing of income tax returns to avoid any sort of late fines, penalties or other consequences.