Siliguri, Sep 25 : Income tax is a vital source of revenue for the government, funding essential services like welfare programs, infrastructure, defense, and public salaries. In India, taxpayers are required to file an Income Tax Return (ITR) to report their income and tax liabilities. The deadline for individuals not subject to a tax audit is typically July 31 of the following financial year. If you’ve missed this deadline, don’t panic—there are steps you can take to rectify the situation. This article outlines what an ITR is, the consequences of missing the deadline, and actionable steps to address late filing.
What Is an ITR?
An Income Tax Return (ITR) is a form used to declare your gross taxable income, deductions, exemptions, and taxes paid for a specific financial year. It determines your net tax liability and ensures compliance with the Income Tax Department.
Consequences of Missing the ITR Deadline
Failing to file your ITR by the due date can lead to penalties and complications, including:
1. Late Filing Penalty (Section 234F)
Under Section 234F of the Income Tax Act, late filing incurs:
• A penalty of ₹5,000 for delayed returns.
• For taxpayers with an annual income of less than ₹5 lakh, the penalty is capped at ₹1,000.
2. Interest on Unpaid Taxes (Section 234A)
If you owe taxes, you’ll be charged 1% interest per month (or part of a month) on the outstanding tax amount, calculated from the due date until the date you file your return or settle the tax liability.
3. Potential Legal Action
Non-compliance can lead to severe consequences:
• If your tax liability exceeds ₹25,000, you may face rigorous imprisonment for 6 months to 7 years, along with a fine.
• For liabilities of ₹25,000 or less, imprisonment may range from 3 months to 2 years, plus a fine.
4. Loss of Carry-Forward Benefits
Timely ITR filing allows you to carry forward losses (e.g., from business or investments) to offset future income. Missing the deadline forfeits this benefit, potentially increasing your future tax burden.
What Should You Do If You Missed the ITR Deadline?
If you’ve missed the July 31 deadline, here’s how you can take action:
1. File a Belated ITR Immediately
You can still file a belated ITR under Section 139(4) of the Income Tax Act. The deadline for a belated return is December 31 of the assessment year (e.g., December 31, 2025, for FY 2024-25).
• How to file: Use the Income Tax Department’s e-filing portal or consult a tax professional to submit your ITR. Ensure all income, deductions, and tax details are accurate.
• Note: You’ll still incur the late filing penalty (₹1,000 or ₹5,000, as applicable) and may owe interest on unpaid taxes.
2. Pay Outstanding Taxes and Interest
Calculate any unpaid taxes and the interest accrued under Section 234A (1% per month). Pay these amounts promptly to minimize further penalties. You can make payments through the e-filing portal or authorized banks.
3. Verify Your Income and Documents
Before filing a belated ITR, gather all relevant documents, such as:
• Form 16 (for salaried individuals)
• Bank statements
• Investment proofs (e.g., for deductions under Section 80C)
• Details of other income sources (e.g., business, capital gains, or rental income)
Double-check your calculations to avoid errors, as inaccuracies can lead to notices from the Income Tax Department.
4. Seek Professional Help
If your financial situation is complex or you’re unsure about the process, consult a chartered accountant or tax professional. They can help you file accurately, claim eligible deductions, and minimize penalties.
5. Respond to Any Notices from the Income Tax Department
If you’ve received a notice for non-filing, respond promptly. Provide the required details or file the belated ITR to avoid further legal action. Ignoring notices can escalate penalties or lead to prosecution.
Proposed Income Tax Slabs for FY 2025-26 (New Tax Regime)
The proposed tax slabs under the new tax regime for FY 2025-26 are:
• ₹0 – ₹4 lakh: Nil
• ₹4 lakh – ₹8 lakh: 5%
• ₹8 lakh – ₹12 lakh: 10%
• ₹12 lakh – ₹16 lakh: 15%
• ₹16 lakh – ₹20 lakh: 20%
• ₹20 lakh – ₹24 lakh: 25%
• ₹24 lakh and above: 30%
Conclusion
Missing the ITR filing deadline can result in penalties, interest, and legal consequences, but taking prompt action can mitigate these issues. File a belated ITR as soon as possible, pay any outstanding taxes with interest, and ensure your documentation is accurate. Consulting a tax professional can streamline the process and help you stay compliant.
Article Contributed by CA. Varsha Jain, Chartered Accountant
