Every individual liable to pay tax in India is required to file Income Tax Return before the due date as specified in the Income tax act, 1961.
Due date is different from person to person and is decided by the Government of India.
Some people also call it last date of filing income tax return (ITR). But in reality, due date is not the last date.
If someone missed the due date, then he or she can still file Income Tax return on or before 31st December of the relevant assessment year. But in such cases, assessee is required to pay late filing fee, interest and penalty for not filing of income tax return in time.
For the purpose of filing Income Tax Return, financial year means the year in which you have earned the income. The financial year immediately following the above mentioned year is known as the assessment year.
As per the law, you are required to file Income Tax Return for the income earned in a financial year in the related assessment year.
For instance, income earned during the period starting from 1st April 2021 to 31st march 2022 is known as financial year 2021-2022. Income earned during the financial year 2021-22 will be assessed to tax in the assessment year 2022-23.
In this article, we will be discussing problems that may arise for Late or Non Filing of the Income Tax Return.
Before getting into it, let us first understand income tax due dates applicable to an individual.
Income Tax Return filing Due dates for individuals
Income tax return filing due date for an individual is 31st July of the assessment year relevant for the financial year for which return has to be filed.
In case the individual is liable to tax audit then due date will is 30th October instead of 31st July.
These due dates can be extended by CBDT. If its extended then such extended date will be considered as due date of filing income tax return for that relevant assessment year.
For financial year 2021-2022, Income Tax Return filling due date is 31st July 2022. If the individual is liable for tax audit then 30th October 2022 will be the actual due date. In case CBDT has extended the due date, then such extended due dates will the consdered as actual due date of filing. We will update this article if such notification is issued by CBDT.
What if income tax return filing due date is missed
If you missed the due date of filing Income Tax Return, then you can still file the ITR on or before 31st December of the relevant financial year.
Here are the consequences of late or non filing of the Income Tax Return.
Late filing Fee
From financial year 2017-18 onwards, government has introduced a concept of late filing fee into the income tax act 1961 i.e. section 234F. This section has been amended recently.
As per this change, if return is filed beyond due date but before 31st December of the following financial year, then late filing fee of Rs. 1,000 has to be paid if total income does not exceed Rs. 5,00,000.
If total income equal to or more than Rs. 5,00,000, then late filing fee of Rs. 5,000 will be paid in case it’s filed beyond the due date of filing but on or before 31st December of the relevant assessment year.
To know how late filing fee is applicable for this financial year, you can visit the following article.
Also read: Later filing fee for income tax return
No carry forward of losses
Business and capital losses cannot be carried forward to subsequent financial years to offset against that year incomes. However, house property losses and un-absorbed depreciation can be carried forward even if Income Tax return is filed after the due date.
Interest on tax amount for late filing
As discussed above, an individual can file income tax return before 31st July of the assessment year without paying any late filing fee.
However, in case tax liability has not been paid before the due date of filling then interest will be levied on the amount of tax that is unpaid.
Interest in this case will be chargeable at the rate of 1% per month or part of the month up to the date of filing Income Tax Return.
If assessee has not filed the Income Tax Return, then interest has to be calculated from the due date till the date of completion of assessment order passed by the assessing officer.
Such interest has to be calculated on net tax payable i.e. after deducting TDS, TCS and advance tax paid if any.
If your total unpaid tax liability is more than Rs. 10,000, then you may be liable to pay additional interest under section 234C and 234B for not paying it in advance. Read our article on advance tax to know more.
Delay in getting tax refund
After filing your Income Tax Return, central processing unit at Bangalore will process your tax refund if any available to you. Its only then tax refund will be determined and processed to your bank account. If you delay in filing income tax return, then it will result delay in processing refund to your account.
Interest on such tax refund will not be paid for the period of delay in filing income tax return.
To avoid all these problems, we suggest you to prepare yourself at the beginning of the year. Collect all those documents that are relevant for your Income Tax filing and then find out the tax liability if any and paid it along with interest if applicable.
