Belated means late or occurring later than the usual time. When someone says a belated return, this means the income tax return has been filed after the due date of filing.
Let us understand provisions of income tax for belated returns and what consequences taxpayers will face by filing a belated return.
The deadline or last date for filing income tax return (ITR) in case of a taxpayer whose accounts are not required to be audited by a chartered accountant for the financial year 2021-22 (assessment year 2022-23) is 31st July 2022. But you can still file a belated return till 31st December 2022.
31st July 2022 is referred to as the due date of filing income tax return. Government wants you to file your income tax return before this due date in order to avoid penalty, interest and other consequences.
In case you missed the due date of filing, then you can still file your return on or before 31st December 2022. However, it will be referred to as a belated return for late filing.
Government may extend both the dates in case taxpayers face any practical difficulties in filing income tax return. If these dates are extended, then the new dates as specified by the government will be treated as the actual due dates for filing income tax return.
In simple terms, a belated return is a tax return which is filed after the stipulated due date mentioned in the income tax law.
What if you failed to file a tax return before the due date?
As per income tax law, if you failed to file an income tax return, then you can file a belated return up to 3 months before the end of the assessment year or completion of assessment, whichever is earlier. 3 months before the end of the assessment year is 31st December of the assessment year.
If you missed the 31st December 2022 deadline for the financial year 2021-22 (assessment year 2022-23), then the taxpayer will not be able to file the tax return voluntarily. It can only be filed in response to a notice from the income tax department.
Last year (Financial year 2020-21) keeping in view of the pandemic, Government extended the original return filing due date of 31st july 2021 twice to 30th September 2021 and then to 31st December 2021. The belated return date of the financial year 2020-21 was also extended up to 31st March 2022.
For the year 2021-22 (AY 2022-23), we suggest you not to wait for extention of time limit by the Government. File your tax return on or before the due date. However, if its extended, then we will update it in our website.
What are the Consequences of belated return
If you missed the due dates of filing income tax return, then for filing a belated return, you may have to pay a penalty.
As per section 234F of the Income Tax Act, 1961, a belated income tax return attracts a late filing fee of Rs. 1,000 in cases where the gross total income of the taxpayer does not exceed Rs. 5,00,000 for the financial year 2021-22.
In case the gross total income exceeds Rs. 5,00,000, then the penalty is Rs. 5,000.
However, if the gross total income is below the basic exemption limit, then taxpayers need not pay any late filing fee subject to satisfying certain conditions.
Basic exemption limit for an individual who is up to an age of 60 years is Rs. 2,50,000, for individuals between the age of 60 years and 80 years is Rs. 3,00,000 and for those above the age of 80 years its Rs. 5,00,000.
In addition to section 234F late filing fee, taxpayers may also be required to pay penal interest under section 234A at the rate of 1% per month or part thereof on the unpaid tax amount.
In addition to above, the taxpayer will not be eligible to carry forward or set off loss from succeeding year under the following heads
- capital gain,
- business and profession, and
- owning and maintaining race horses
However, losses from the head “house property” and “unabsorbed depreciation”can be carried forward.
In case of refund, the income tax department pays interest under section 244A of the Act on such refund due. If the taxpayer has filed the return on or before the due date of filing, then the such interest is calculated from the first day of the relevant assessment year. However, in case of belated return, interest on refund is calculated from the date of furnishing the IT return. Therefore, the assessee will lose a portion of interest for late filing of tax return.