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What is the Last Date for ITR Filing, and What is the Penalty for Late Filing?

Are you late in filing your income tax return? Learn about the penalties and other consequences of late filing and how to avoid them.

  • 6,811 Views | Updated on: Apr 08, 2024

In the maze of personal finance management, one critical step often gets lost in the shuffle: filing income tax returns. While it may seem mundane and time-consuming, the significance of filing tax returns promptly cannot be overstated. Beyond fulfilling one’s civic duty, timely tax filing holds a plethora of benefits for individuals.

Paying taxes is a moral and lawful duty of every citizen of India. If your annual income is taxable, it is expected that you pay it on time every year, or you will face heavy penalties. In this blog, we delve into the intriguing world of income tax returns, unraveling their importance and shedding light on the dire ramifications of late filing.

Consequences of Late Filing of ITR

The consequences of late filing can be burdensome, leading to penalties, interest charges, lost refunds, and potential legal issues. Here are some of the issues you can encounter if you are a late tax filer.

Penalties and Interest

One of the immediate consequences is the imposition of a penalty for late filing of income tax returns and interest on late filing. The more you delay, the higher the penalties and interest charges. These additional financial burdens can erode one’s hard-earned money and disrupt financial plans.

Loss of Refunds

Failing to file tax returns in a timely manner can lead to the forfeiture of potential tax refunds. In cases where individuals are eligible for refunds. Delaying the filing means delaying the receipt of these funds, which could have been put to better use or invested elsewhere.

Audit Risk and Scrutiny

Late filers are more likely to attract the unnecessary attention of tax authorities, leading to time and resource-consuming audits. This all could have been avoided if you had filed the taxes on time.

Reduced Time on Return Revision

Late ITR filing can lead to reduced time for revising your ITR return. Under the ITA (Income Tax Act) of 1961, taxpayers have the right to revise their ITRs within one year of the end of the relevant assessment year. However, if you file your ITR after the due date, this time limit will be reduced. For example, if you file your ITR for the assessment year 2023-24 (FY 2022-23) after the due date of 31st July 2023, you will only have until 31st December 2023 to revise your return.

Did You Know?

If you have a history of late ITR filing, you may be denied a loan or a credit card. This is because lenders and credit card companies see late ITR filing as a sign of financial instability.

Penalties for Late ITR Filing

As per different sections of ITA, there is a provision of penalty for late filing of ITR. These penalties are imposed when there are discrepancies or delays in filing the returns. These penalties can range from monetary penalties to imprisonment.

Let us take a look at a few of them.

Section 234F – Penalty for late-filing of Returns

According to the modified guidelines published under section 234F of the Income Tax Act, submitting your returns after the ITR due date may subject you to a maximum penalty of ₹5,000.

Section 234A – Interest on delayed filing of Returns

Incentives are assessed for late filing of the income tax return under section 234A. The interest percentage charged is at a rate of 1% per month.

Section 234B – Interest on delayed payment of Advance Tax

Section 234B imposes interest of 1% per month or a fraction thereof for failure to pay advance tax. To put it another way, the taxpayer is responsible for paying simple interest at a rate of 1% per month for failure to pay advance tax.

Section 234C – Interest on deferred payment of Advance Tax

If a taxpayer is late with the payment of advance tax, there are a number of provisions in Section 234C of the Income Tax Act of 1961 that may apply. The interest rate on the advance tax payable is one percent of the total amount still owing. It is calculated starting from each cutoff date separately and continuing until the day the required tax is actually paid.

Section 276CC of Income Tax Act – Penalty for Late Filing

If ITR is not filed, it is punishable by imprisonment under Section 276CC. According to the Finance Act of 2023, failure to file a return of income in accordance with Section 139(1) and failure to respond to a notice issued under Section 142(1)(i), Section 148, or Section 153A will result in action being taken under Section 276CC.

Income Tax Filing Due Dates for FY 2022-23 (AY 2023–24)

Beginning the first week of June, income tax returns (ITRs) for AY 2023–24 (FY 2022-23) can now be filed electronically. The Income Tax Department has recently released offline utility for ITR-1, ITR-2, and ITR-4 filing.

For FY 2022–2023, the last date to file an ITR is therefore discussed below.

Category of Taxpayer

Due Date for Tax Filing- FY 2022-23 (AY 2023-24)

Individual / HUF/ AOP/ BOI

(No auditing for books of accounts)

31st July 2023

Businesses ( Audit required)

31st October 2023

Businesses requiring transfer pricing reports

30th November 2023

Revised return

30 December 2023

Late return

30 December 2023

Late Filing Fee Details

In case you are late for filing your ITR, you can still make it. Government issues a late filing fee for taxpayers who are late for tax filing. Have a look at the details in the table below:

E-Filing date for individuals/HUF

Total income below ₹5 lakh

Total income above ₹5 lakh

Up to 31st July 2023

₹0

₹0

Between 1st Aug 2023 to 31st Dec 2023

₹1,000

₹5,000

Wrapping Up

The consequences of late filing of income tax returns cannot be overlooked or underestimated. From financial penalties and interest charges to potential legal repercussions and a tarnished reputation, the negative impact of procrastinating on tax obligations can be significant. Late filers face not only immediate financial burdens but also risk long-term consequences such as damaged credit history, restricted access to loans, and strained relationships with tax authorities.

To avoid these detrimental outcomes, it is crucial for individuals and businesses to prioritize timely tax filing, maintaining compliance with tax laws, and fulfilling their civic responsibilities. By understanding and appreciating the gravity of the consequences, we can foster a culture of accountability and responsible tax management, contributing to a stronger and more equitable financial system for all.

Importance of Filing Income Tax Returns (ITR)

The importance of filing income tax returns promptly should not be underestimated. It not only fulfills a legal obligation but also serves as a gateway to financial stability, access to benefits, and opportunities for growth.

Legal Compliance and Civic Responsibility

Filing income tax returns is a fundamental legal obligation for every eligible citizen. By fulfilling this duty, individuals contribute to the functioning of their nation and its infrastructure. It ensures the government has a reliable source of revenue to finance public services, welfare programs, and essential infrastructure development.

Accurate Assessment of Tax Liability

Filing tax returns provides an opportunity for individuals to assess their tax liability accurately. By reporting their income, deductions, and credits, taxpayers can determine the precise amount of tax they owe or, in some cases, become eligible for refunds. It is through this meticulous process that individuals can avoid potential underpayment or overpayment of taxes.

Building a Financial Profile

Consistently filing tax returns demonstrates financial responsibility and helps individuals build a robust financial profile. This can prove beneficial when applying for loans, mortgages, or even rental agreements. Lenders and financial institutions often consider tax returns as crucial documents to assess an individual’s financial stability and creditworthiness.

    Key Takeaways

  • Filing income tax returns promptly is crucial as it fulfills a legal obligation and opens doors to financial stability, benefits, and growth opportunities.
  • It allows for an accurate assessment of tax liability, ensuring individuals pay the correct amount and avoid potential underpayment or overpayment of taxes.
  • Consistently filing tax returns helps build a strong financial profile, which can be advantageous when seeking loans, mortgages, or rental agreements.
  • Late filing of tax returns comes with burdensome consequences, such as penalties, and interest charges, leading to potential legal issues.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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