What are the Consequences of Missing Your ITR Filing Due Date

It takes only a few minutes to file your ITR with the online e-filing option available on the income tax portal, so this time period is more than reasonable. You must file the returns before the deadline in addition to paying the taxes on time to avoid penalties. The ITR filing deadline for taxpayers whose accounts do not require an audit is July 31, 2022. It has been noted that a significant portion of taxpayers wait until the deadline to submit their ITRs. But the last-minute hassle frequently leads to inaccurate filing. Therefore, tax professionals urge taxpayers to finish ITR filing as early as possible and avoid the last-minute rush.

According to the recent data shared by the I-T Department, over 3 crore ITRs have been filed for Assessment Year (AY) 2022-23 so far. Keep in mind that you must fulfil your obligation to file the ITR by July 31, 2022, of every year. Additionally, there are consequences for missing the deadline, including penalties.

With that being said, what are the consequences if someone misses the deadline?

Many taxpayers thought the routine now is that the ITR filing deadline would be extended. However, one should not wait for the date extension to file the ITR. The government has made it clear that the last date will not be extended this year; anyone missing the July 31, 2022 deadline will be liable for a penalty and may file their ITR after paying a late fee by the end of December 2022. This article elucidates the consequences of late filing of ITR.

Given that, taxpayers believe they have no further obligation if they have paid their taxes. However, missing the ITR filing deadline has legal consequences. The Income Tax Act, 1961 provides a number of penal provisions to curb tax evasion and penalise the defaulters in case of non-filing of returns and non/short payment of income tax. Effective from the financial year 2017-18, a late filing fee is applicable for filing returns after the due date.

Taxpayers should file the ITR as soon as possible to get a quick refund & in order to avoid interest under sections 234 A, B & C and late filing fees u/s 234F.

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What is late filing fees u/s 234F?

For instance, the due date for filing returns for FY 2021-22 is July 31, 2022. If you miss filing ITR by the due date, you can file the late return by December 31, 2022. However, you are required to pay the penalty for late filing. As per section 234F, the IT department can impose a penalty of Rs. 5,000 if ITR is reported after July 31, 2022, but before December 31, 2022 of the Assessment Year, and Rs 10,000 if ITR is reported after December 31, 2022, but before March 31, 2022 of the Assessment Year.

In the case of AY 2022-23, the penalty of Rs 5,000 will be levied if you file your ITR after the due date of July 31, 2022, but before December 31, 2022. A penalty of Rs 5,000 will be charged for the delay in filing returns if the total income is reported Rs 5 lacs. However, for small taxpayers, if the total income of the person is less than Rs 5 lacs, then the fee payable is up to Rs 1,000.

After December 31, 2022, of the relevant assessment year, one cannot voluntarily file ITRs. After that, if and when the income-tax department picks up your income and tax details available for scrutiny, the IT department will direct the defaulter on how to comply with the mandatory provisions by paying penalties and interest.

Section 234 of the Income-Tax Act also deals with penal interests that are levied for delays in paying taxes on time.

Once the financial year (in which you earn your income; 2021-22 at present) gets over, you need to start preparing your income tax returns to be paid by July 31 (the usual deadline date for filing your tax return). It's important to ensure that you file your income tax return (ITR) on time, i.e., before the deadline, to avoid paying a late filing fee u/s 234F.

Current income tax laws allow individuals to file ITR even after the expiry of the deadline, and the ITR filed after the deadline is termed as a belated ITR. In Union Budget 2021, the government has reduced the time limit of filing belated/revised ITR by three months, from March 31 earlier to December 31. Hence, if the ITR filing deadline of July 31, 2022 (for FY 2021-22) is missed, then you can file belated ITR till December 31, 2022 (for FY 2021-22). However, there are monetary consequences of filing a belated ITR, as mentioned above.

Do note that the last date of filing belated ITR is December 31 (unless the date is extended by the government). As per income tax laws, certain individuals are exempted from paying a late filing fee, even if they file belated ITR.

In case an individual's gross total income does not exceed the basic exemption limit (unless they are mandatorily required to file ITR even if the total income is below the basic exemption limit), then they will not be liable to pay late filing fees if they file a belated ITR. If an individual whose gross total income does not exceed the basic exemption limit files a belated ITR, then you will not be liable to pay the penalty for late filing.

As per current tax laws, the basic tax exemption limit applicable to an individual depends on the tax regime chosen by them, i.e., old or new tax regime. In addition, if a resident individual has income from foreign assets and they file belated ITR, then a late filing fee will be levied even if gross total income does not exceed the tax exemption limit.

Do note that the Income Tax Return (ITR) filing due date for Assessment Year 2022-23 is nearing. Therefore, it is important for every taxpayer to file their ITR before the last date i.e., July 31, 2022 to avoid and consequences. Taxpayers can file their ITR for AY 2022-2023 on the Income Tax website (https://incometaxindia.gov.in) by themselves, or you may take the help of tax filing professionals.

[Read: How to File Your ITR Online for FY 2021-22 and AY 2022-23]

Warm Regards,
Mitali Dhoke
Jr. Research Analyst